Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand Cover photo © UNICEF Thailand/2011/Athit

© UNICEF Thailand/2014/Metee Thuentap Foreword

As part of the study on how to improve the efficiency and fairness of Thailand's educational expenditure, a survey targeting at the 15 Year Free Education Scheme (free-education subsidy from early childhood levels to the completion of basic education) was carried out by the Office of Basic Education Commission (OBEC) in collaboration with the Faculty of Economics, Thammasat University and UNICEF Thailand. By applying the Public Expenditure Tracking Survey (PETS), a survey tool used in many countries, to examine the extent of benefits that reached targeted beneficiaries, the survey was helpful in identifying the programme's financial and management limitations, increasing the transparency in the allocation of resources to schools, together with engaging parents and the civic sector in the supervision of programme spending.

The 15 Year Free Education Scheme accounts for 18 percent of Thailand's education budget, equivalent to more than Baht 90,000 million. The scheme's expenditure tracking is therefore crucial for the improvement of its spending and the quality of educational service. This survey targeted only the part of the scheme managed by OBEC using a budget of more than Baht 40,000 million, covering over 7 million beneficiaries.

UNICEF Thailand provided planning, technical and funding support for the survey design and implementation and contracted an expert (Dr. Bernard Gauthier, HEC Montreal) to advise on the survey analysis and report writing as well as the initial field work, which was headed by Associate Professor Dr. Chaiyuth Punyasavatsut, the Faculty of Economics, Thammasat University, and involved 63 persons (listed in the appendix) working in advisory, data collection and academic support teams. Data support came from OBEC's Policy and Planning Bureau (สํานักนโยบายและแผน), which took part in the planning and supervision of the survey, data collection exercise from sample groups throughout Thailand and preparation of a report to inform policy.

Presented in this paper are the survey's findings concerning the implementation at the central and school levels, governance system and interrelated issues of the 15 Year Free Education Scheme, together with recommendations to inform policy for future actions.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand iii Acknowledgements

The present report is accomplished with the outstanding helps and suggestions from numerous participants from the Ministry of Education and in our series of meetings and seminars. Lists are long and we would like to thank them all here.

In particular, we are grateful to Kamol Rodklai, secretariat of the Office of Basic Education Commission, Rangsun Maneelek, the vice secretariat of the Office of Basic Education Commission-Ministry of Education, Andrew Claypole, chief of the social policy of the UNICEF-Thailand for initiating this collaborative project and providing research funds. Much of the work on coordination and finalizing the reports were done with help from the UNICEF team: Christina Popivanova, Hugh Delaney, Rungsun Wiboonuppatum, Lema Zekrya Syed, Temika Satayawiboon and Chayanit Wangdee; and the Policy Planning Division-OBEC team: Naree Susutti, Payom Chinnawong, Amnaj Witchayanuwat, Lilin Songpasook, Benjawan Duangjai, Pairin Sukhampang, and Pipat Patchpomsorn.

Special thanks are owed to the numerous enumerators from educational district offices who spent considerable time to conduct the field surveys with efforts till the survey was fulfilled.

We especially thank Bernard Gauthier (HEC Montreal) for his dedicated work and technical expertise on supervising the project from the beginning till the end. Much of the report was also written by him.

We also thank our wonderful research assistants, Sudaporn Panklin, Dollapak Chaiyabutr, Natcha Kongkaew, Pongtat Vanichanan and Yongyut Lamoonmorn. Finally, we much appreciate Karen Emmons for editing the final report.

Chaiyuth Punyasavatsut Faculty of Economics Thammasat University

iv Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand Contents

Foreword ...... iii Acknowledgements...... iv Abbreviations...... ix Executive summary...... xi

1. Introduction...... 1

2. Public Expenditure Tracking Survey methodology...... 5 2.1 The Public Expenditure Tracking Survey approach...... 5 2.2 Main sources of information...... 6 2.3 Sampling...... 6 2.4 Scope of the study...... 10 2.5 Data collection and verification...... 11

3. Thailand’s education sector and the 15-year Free Education Programme...... 13 3.1 Thailand’s education system organization and public expenditure...... 13 3.2 Free Education Programme: Background, objectives and rationale...... 16

4. Budget allocation, release and spending in the Free Education Programme.... 23 4.1 Budget process: Delays in budget transfers...... 23 4.2 Delays in information flow to schools...... 26 4.3 Budget allocation: Execution rate at the central level and disbursement to schools...... 27 4.3.1 Budget execution at the central level...... 27 4.3.2 Disbursement to schools...... 28 4.4 School receipt of their FEP resources...... 29 4.5 School management of FEP subsidies...... 32 4.5.1 Schools’ overall use of FEP subsidies ...... 32 4.5.2 General subsidy for learning and teaching activities...... 35 4.5.3 Books...... 36 4.5.4 Learning materials ...... 39 4.5.5 Student uniforms ...... 43 4.5.6 Student development activities...... 45 4.6 School management of the FEP top-up subsidies...... 47 4.6.1 Poor student subsidy...... 47 4.6.2 Boarding student subsidy ...... 51 4.7 School management of other resources: Lunch and milk subsidy programmes from Local Administrative Offices...... 52 4.8 Resources available at the school level: Inequities and targeting...... 54 4.9 Governance of the FEP ...... 65 4.9.1 Role and capacity of the Educational Service Area Office...... 65

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand v 4.10 School environment: Teachers and school management...... 68 4.10.1 Absenteeism...... 69 4.10.2 School directors...... 73 4.10.3 Parents...... 73 4.11 Links between FEP and student performance ...... 74

5. Concluding remarks and recommendations...... 85 5.1 Concluding remarks...... 85 5.2 Recommendations...... 90 5.3 The way forward ...... 93 5.4 Lessons learned ...... 93

References...... 95 Appendix I Survey methodology...... 97 Appendix II Basic statistics of survey data...... 102 Appendix III Information delays...... 104 Appendix IV Special and welfare schools under the Bureau of Special Education Administration..106

Tables

Table 2.1: Numbers of surveyed schools in each region, by school size...... 7 Table 2.2: Main characteristics of the schools in the survey sample...... 8 Table 2.3: Main characteristics of the households in the survey sample...... 9 Table 2.4: Main characteristics of the teachers and school administrators in the PETS sample... 9 Table 2.5: Main characteristics of the sampled Educational Service Area Office...... 10 Table 3.1: Education budget, by levels of education, 1999–2014 (million baht)...... 14 Table 3.2: OBEC education budget, by spending categories, 2010–2014 (million baht)...... 15 Table 3.3: FEP budget allocation, FY 2012/13 and FY 2013/14 (million baht)...... 17 Table 3.4: OBEC’s Free Education Programme budget, FY 2009/10–FY 2013/14 ...... 18 Table 3.5: Per-student subsidies under the 15-year Free Education Programme, 2014 school year...... 20 Table 3.6: Top-up subsidies for welfare and special schools under the 15-year Free Education Programme...... 21 Table 4.1: Delays in budget petition by the Policy and Planning Division...... 25 Table 4.2: Delay of school receipt of FEP resources...... 26 Table 4.3: Delay in the information flow about the budget transfer from the Policy and Planning Division to ESAO and to schools (numbers of days)...... 27 Table 4.4: FEP central-level budget execution rate, FY 2013/14...... 28 Table 4.5: Allocated per-student subsidy by categories of subsidies and school size, types and location, FY 2013/14...... 31 Table 4.6: School spending by subsidy categories (amounts and shares), FY 2013/14...... 32 Table 4.7: FEP subsidy spending, receipt and use rate, by subsidy category, FY 2013/14...... 34 Table 4.8: Percentage of remaining FEP funds at the school level, FY 2013/14 and FY 2014/15...... 34

vi Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand Table 4.9: General subsidy use, by category of school activities, amount and share, FY 2013/14...... 36 Table 4.10: Book expenditure per student, FY 2013/14...... 37 Table 4.11: Book delivery...... 39 Table 4.12: Student uniform subsidy...... 43 Table 4.13: Household receipt of the uniform subsidy...... 45 Table 4.14: Poor student subsidy spending per actual student (baht)...... 49 Table 4.15: Household receipt of the poor student subsidy...... 50 Table 4.16: Boarding student subsidy...... 52 Table 4.17: Sources of school resources per student (baht per student per year and %)...... 55 Table 4.18: Total resources per student, by source, school level, size and location, including FEP contributions (baht per year)...... 56 Table 4.19: Gini decomposition, by (non-wage) recurrent income sources...... 60 Table 4.20: Gini decomposition, by (non-wage) recurrent income sources...... 64 Table 4.21: ESAO budget and transfers to schools in the PETS sample...... 65 Table 4.22: Frequency of schools visits by ESAOs...... 66 Table 4.23: Frequency of FEP activity visits, by ESAOs, 2013/14 school year (number of visits per school)...... 67 Table 4.24: Characteristics of teachers who were absent and reasons for their absence...... 71 Table 4.25: Teachers’ satisfaction in their work, desire to relocate and turnover...... 72 Table 4.26: School directors’ characteristics, by school size, level and location...... 73 Table 4.27: Parents’ contributions (baht per student per year)...... 74 Table 4.28: Average O-NET scores of the school sample, by school size, 2013/14 school year.. 78 Table 4.29: Descriptive statistics of variables in the regression model...... 79 Table 4.30: Regression analysis between test scores and their determinants...... 82

Table A1: Basic statistics of the PETS findings...... 102 Table A2: Delay in the information flow on budget transfers from Policy and Planning Division to ESAOs and schools (numbers of days), by ESA...... 104 Table A3: Main characteristics of school sample under the Bureau of Special Education Administration...... 108 Table A4: Budget of the Bureau of Special Education Administration, FY 2014/15...... 109 Table A5: FEP subsidy rates for special and welfare schools, FY 2013/14...... 109 Table A6: Delay in budget petition by Bureau of Special Education Administration ...... 110 Table A7. Delay of school receipt of FEP resources...... 110 Table A8: FEP budget execution rate in FY 2013/14...... 111 Table A9: Difference between BSEA budget allocation and school reception...... 111 Table A10: Allocated per-student subsidy, by category of subsidy, FY 2013/14...... 111 Table A11: School actual spending shares on each subsidy, FY 2013/14...... 112 Table A12: Percentage of FEP subsidy receipt, spending and use rate, by schools, FY 2013/14...... 113 Table A13. Percentage of remaining FEP funds at school level, 2013/14 and 2014/15 school years...... 113 Table A14: Expenditures, by categories of school activities, FY 2013/14...... 113 Table A15: Learning materials...... 114 Table A16: Student uniform subsidy...... 114

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand vii Table A17: Student development activities...... 115 Table A18: Source of school resources per student (baht/student/year and %)...... 116

Figures

Figure 3.1: Education budget, 1999–2014 (%)...... 15 Figure 3.2: Budget and information flows under the FEP...... 19 Figure 4.1: Rhythm of actual FEP disbursement to schools, FY 2013/14...... 29 Figure 4.2: Differences between the Policy and Planning Division budget allocation and school receipts...... 30 Figure 4.3: Percentage of schools experiencing an upward subsidy adjustment, FY 2013/14.... 32 Figure 4.4: General subsidy overuse rate, by school type and location, FY 2013/14...... 35 Figure 4.5: Book subsidy overuse rate, by school type and location, FY 2013/14...... 37 Figure 4.6: Number of books purchased per student, by type of school, location and size, FY 2013/14...... 38 Figure 4.7: Learning materials...... 40 Figure 4.8: Household receipt of learning materials, FY 2013/14...... 42 Figure 4.9: Student development activities...... 46 Figure 4.10: Poor student subsidy...... 48 Figure 4.11: Problems with the lunch programme (non-FEP)...... 53 Figure 4.12: Main problems with the milk programme...... 54 Figure 4.13: Total resources per student, by source and region and by primary and secondary schools...... 57 Figure 4.14: Total resources per student, by source, region and school size...... 58 Figure 4.15: Total resources per student, by source and district...... 59 Figure 4.16: Poor student subsidy, receiving coverage and spending coverage...... 63 Figure 4.17: Main problems with the FEP, as reported by ESAOs, 2013/14 school year ...... 68 Figure 4.18: Teacher absenteeism...... 70 Figure 4.19: Share of work week devoted to FEP and other administrative work...... 72 Figure 4.20: FEP resources and total school expenditure per student, 2013/14 school year...... 75 Figure 4.21: Relationship between school size and per-student spending, by primary and secondary schools...... 76 Figure 4.22: Parents’ contributions and percentage of poor students...... 77 Figure 4.23: Average test scores (ONET) and school expenditure per student...... 80 Figure A1: Provinces in the survey sample, by geographical region ...... 100

viii Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand Abbreviations

ESA Educational Service Area ESAO Educational Service Area Office FEP Free Education Programme FY fiscal year GDP gross domestic product GFMIS Government Fiscal Management Information System LAO Local Administrative Office OBEC Office of the Basic Education Commission O-NET Ordinary National Education Tests OPEC Office of the Private Education Commission QSDS Quality Service Delivery Survey

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand ix ©UNICEF Thailand/2013/Jingjai N. x Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand Executive summary

The Government of Thailand has invested important resources in basic education in the past few decades to improve access and quality of basic education for all. Public spending on education increased by more than 50 per cent in real terms between 2000 and 2014, when it represented 21 per cent of the government budget and 4.1 per cent of gross domestic product. Through the 15-year Free Education Programme (FEP), which provides subsidies to primary and secondary schools and households, the Government seeks to improve the quality of basic education and all children’s access to it.

Despite the progress in enrolment in primary and secondary schools in the past decade, barriers to equitable and quality education remain. Net primary school enrolment was more than 90 per cent in 2012 and continues to be marked by disparities in access for disadvantaged groups, in particular children from poor households and ethnic minorities, children living in remote areas and with disabilities and migrant children. National and international test scores reveal declining education outcomes and wide gaps in performance and knowledge among student groups.

In 2015, UNICEF Thailand, in conjunction with the Ministry of Education, conducted a Public Expenditure Tracking Survey (PETS) of the FEP. The objective of the PETS is to assess the efficiency and equity of public expenditure on education through the programme and evaluate the services offered to children. By tracking the flow of resources through the various levels of the public administration down to schools and households, the PETS monitors how much designated public resources reach intended beneficiaries and identifies bottlenecks in the programme’s implementation so as to diagnose problems in service delivery and to propose measures to strengthen performance, accountability and monitoring.

Created in 2009 to reduce parents’ financial burden and promote free basic education for all young people, the FEP represents the main source of non-wage recurrent public funding to primary and secondary schools. In fiscal year (FY) 2013/14, the FEP budget amounted to 91.7 billion baht (about $2.6 billion), representing 17.7 per cent of education expenditure.

This report presents the findings of the PETS conducted between January and April 2015 in a sample of 190 public primary schools, 50 public secondary schools and 10 special and welfare schools located in 24 districts (of 225) in Thailand. Information was also collected from a sample of 1,863 teachers and 2,500 households, complemented by data from district and central education authorities, including from the Government Financial Management Information System data (managed by Comptroller General’s Department).

The survey and ensuing analysis focused only on the public school component of the FEP, which is provided through the Office of the Basic Education Commission (OBEC).The FEP also covers private and vocational training schools under the responsibility of Local Administrative Organizations through other central government agencies. In FY 2013/14, the OBEC component covering public schools represented 80 per cent of eligible primary and secondary school students in Thailand and about 46 per cent of the programme’s budget.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand xi Executive summary

Programme design and central governance issues The FEP was designed to pursue horizontal and vertical equity objectives through a subsidy allocation system to schools.

The FEP objectives include universal quality education promotion and poverty reduction. Through various capitation grant (per student) transfers to primary and secondary schools, the FEP pursues its objectives of access to quality education for all children (horizontal equity). In addition, through the ‘top-up’ subsidies for poor students and boarding and special school students, the FEP promotes increased access and enrolment for disadvantaged groups through income redistribution (vertical equity). The poor student subsidy differentiates schools in terms of student population’s poverty levels, ideally compensating for inequities across school populations.

While the ultimate cash recipients of several subsidy components are households, the FEP has adopted the unusual approach of pursuing its allocation and redistribution objectives through a subsidy allocation system to schools. Three of the five subsidy categories to students are administered by schools (learning and teaching activities, school books and student development activities), while the other two subsidies (student uniforms and learning materials) are transferred by schools to parents in-cash or in-kind. In addition, the poor student subsidy is allocated to schools, based on a school assessment of student poverty rates, and could be transferred in-kind or as cash to households. Such an indirect approach of subsidy transfers to households, which gives schools management and monitoring responsibility, could potentially reflect a distrust of parents’ decisions and choices for their children’s education. However, it introduces various efficiency and equity problems associated with inadequate targeting at the school level. Budget thresholds affect the programme’s potential impact.

Current rationing of the poor student subsidy affects FEP impact and fairness. Due to budget constraints, the poor student subsidy is allocated to schools with a maximum threshold of 40 per cent of total enrolled primary students and a 30 per cent threshold for lower secondary students. Among the surveyed schools, the poor student subsidy rationing left an estimated 45 per cent of the poor student population uncovered in FY 2013/14. In rural schools especially, almost half of the poor students enrolled in schools in that same fiscal year were not covered by the poor students subsidy transfer.

The current rationing of the poor student subsidy affects the fairness of the programme. Poverty incidence is not uniformly distributed across schools. The PETS found that many schools, especially in rural areas, experienced more poverty than the national average but were allocated a fixed subsidy share.

Despite being the main non-wage recurrent funding, the FEP subsidies constituted a small share of the overall resources at the school level, especially among primary schools. In FY 2013/14, the FEP transfers to schools represented about 10 per cent of the total education resources per student available at the school level. Among primary schools, the programme’s transfers represented only about 8 per cent of total resources per student but constituted about 19 per cent of secondary schools’ resources per student.

Public teachers’ wages from OBEC accounted for about two-thirds of the total resources available at the school level in FY 2013/14. Local governments and other public (non-OBEC) contributions accounted for about 12.5 per cent of primary schools’ total resources, surpassing the

xii Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand Executive summary

FEP transfers, but were almost negligible (less than 1 per cent) for secondary schools. Parents’ contributions through school fees accounted for 6 per cent of secondary schools’ resources but only 0.3 per cent of primary schools’ resources.

Important variations occur in resources available per student across school types, locations and regions.

Total resources available per student tended to decline significantly with increased school size. The PETS found that the total resources available per student in small schools were twice what they were in large primary schools and about one fifth greater than in large secondary schools. Public schools in rural areas, both primary and secondary, received substantially more resources per student than those located in urban areas.

Across regions, primary schools located in the North had access to the largest total endowment of resources per student (at 65,119 baht) in FY 2013/14. This represented 36 per cent more resources per student than in the South, which presented the lowest level of resources (at 47,963 baht per student). Secondary schools located in the South had 16 per cent less resources per student than those located in the North-East (at 33,210 baht, compared with 39,661 baht, respectively).

Differences in resources available across schools were largely due to the unequal distribution of human resources across school locations and sizes. The variation was mainly associated with differences in teachers’ experience across schools, which affects education quality. Inequalities also emerged from differences in the private resources collected by schools (parents’ school fees and local business and community donations) across school locations and communities.

FEP transfers were not large enough or targeted enough to compensate for differences in resources associated with the unequal distribution of teachers and parents’ contributions. Still, the FEP transfers helped reduce the education resource inequalities. The PETS found that every 1 per cent increase in the FEP’s basic learning activity and poor student subsidies reduced the overall inequalities in resources available per student (as measured by the Gini coefficient of relative inequality in total resources per student) by about 7 per cent in the primary schools and 15 per cent in the secondary schools.

If the current ceilings on the poor student subsidy were removed (40 per cent for primary school and 30 per cent for secondary school students), and if the subsidy were allocated to all reported poor students enrolled in schools, it would represent, on average, an extra transfer of 1,437 baht per primary school student and 2,147 baht per secondary school student. Given the 3.7 million poor students reportedly enrolled in Thailand’s public school system in 2014, removing the budget constraint would represent an extra budget requirement of 5.9 billion baht to the public treasury.

Based on analysis of the PETS findings, the removal of the poor subsidy ceiling would lead to improved vertical equity in terms of education resources per student among schools. The budget threshold removal would have an especially significant effect on secondary schools, contributing an estimated 3.7 per cent reduction in total resource inequality, compared with the 1.2 per cent reduction among primary schools.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand xiii Executive summary

Programme implementation issues at the central government and school levels

Inadequate targeting of the poor student subsidy at the school level reduces vertical equity.

About three-fourths of the surveyed schools used the poor student subsidy without targeting, providing in-kind services to all students, both poor and non-poor. On average, subsidies were used for uniforms (at 44 per cent of the surveyed schools), meals (at 19 per cent) and transportation (at 16 per cent). But important variations occurred among school locations and levels. Rural and primary schools preferred spending the subsidy on uniforms (including for sports), while the secondary schools mainly used the subsidy to provide school lunches for lower-secondary students.

The practice of schools allocating the subsidy in-kind to all students within the school reduced the programme’s potential to achieve vertical equity. This practice could help reduce disputes and disparities among poor households—giving previously excluded households access to some benefits. Especially for small rural schools in which most students could be considered poor, such a practice also reflects schools’ inability to screen students by poverty level and reach needy students. It also indicates the lack of specific guidelines given to schools for managing the poor subsidy in the presence of rationing. Ultimately, schools’ practice of using the poor subsidy budget without targeting their spending to poor students is inequitable and dilutes the already reduced per-head subsidy reaching poor students. The lack of targeting of the poor student subsidy is also a form of resource leakage because allocating funds to all students, even those from households with sufficient income, reduces the subsidy given to each poor student.

Among the quarter of schools choosing to transfer the poor student subsidy as cash to households, few kept records of such transfer, despite the FEP guidelines requiring signature approval from each school committee. The PETS found that only 15 per cent of households reported receiving the poor subsidy in cash, which was far less than the 25 per cent coverage reported by schools. The level of transfers reported by households was less than the yearly subsidy set by the guidelines, at only about 13 per cent for primary school children (with students receiving 133 baht rather than 1,000 baht, as per the guidelines) and about 55 per cent for lower secondary school children (with students receiving 1,703 baht rather than 3,000 baht).

Determining the eligible poor students was done without clear guidelines. This practice has potential to result in discretionary decisions on which beneficiaries are selected by school teachers and variance in the criteria used across schools. Determining which students will receive the subsidy and management of the process is time consuming and arduous for school officials and teachers, leading not only to potential biases in beneficiary selection but also reduced teaching time for students.

A large share of the poor student budget appeared to remain unused at the school level, remaining in school bank accounts or school-managed student accounts. The PETS found that, overall, there was limited transparency surrounding the FEP because most schools did not share information with parents about the programme. Most households that were survey were not aware of the poor student subsidy.

xiv Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand Executive summary

Resource flows are affected by imprecise programme guidelines and timelines.

Lack of specific timelines for FEP management at the central level was associated with significant delays in the budget petitions and budget disbursement, which caused the FEP subsidies to reach schools and students late during each school semester. The overall duration of the various FEP subsidy transfers to schools, via the OBEC Treasury, took about 50 days for the general subsidy’s first tranche during the second semester of the 2013/14 school year, while the second tranche was even later, at 72 days on average. The same duration occurred with the poor student subsidy. During the first semester of the 2014/15 school year, shorter delays occurred, except for the boarding student subsidy, which took on average about two months to be transferred to schools.

Discretionary fund use is evident at the school level due to imprecise guidelines.

The imprecise FEP guidelines also explain the discretionary use of the non-executed FEP budget by the Policy and Planning Division. In FY 2013/14, the unused funds at the Policy and Planning Division totalled 5.6 per cent of the planned FEP envelope, amounting to 2,273 million baht, explained in part by a decline in student enrolment and rationing of the poor student subsidy. Given weak guidelines, the unused funds were applied (as per a historical practice) to the school utility bills.

School directors had various interpretations of the FEP guidelines, giving rise to variation in their discretionary use of the subsidies and transfer to beneficiaries. The FEP guidelines at the school level are imprecisely defined and weakly enforced, in particular regarding subsidy use and modalities for transferring the subsidies to households (for uniforms, poor students, books and leaning materials).

Schools reported through the PETS underspending on certain subsidy categories while overspending on others during FY 2013/14. In particular, overspending was reported for basic learning activities, books and the poor student subsidy while underspending occurred for uniforms, student development activities and the boarding school subsidy.

Noticeable underspending occurred with the student development activities subsidy, with large primary schools in urban areas and medium-sized secondary schools in rural areas spending only about two-thirds of their subsidy allocation on these activities in FY 2013/14. This underspending was reflected in the relatively low coverage of the activities; about 19.6 per cent of schools did not provide all four required activities during the academic year. The PETS also found that parents’ supplementary contributions for these activities reached 1,500 baht in the medium-sized and large secondary schools in urban areas.

Important variations occurred in school modality choices for allocating subsidies to households. For instance, one quarter of schools chose to allocate the learning materials subsidy as in-kind to students, with the rest providing a cash transfer to parents. The transferred amount reported by parents was smaller than what was specified in the FEP guidelines, especially for primary school students. Accordingly, 60 per cent of parents with children in primary school reported having to spend extra funds to buy learning materials, and nearly 80 per cent of parents with children in rural secondary schools spent extra on learning materials.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand xv Executive summary

Another important variation occurred in the use of the books subsidy across school locations, with primary and secondary rural schools reporting about 50 per cent lower spending on books per student, compared with urban schools. Rural secondary schools bought fewer books per student (at 11.5 books) than urban secondary schools (at 14 books).

Various delays occurred in subsidy transfers to households. For instance, the learning material subsidy reached households on average 37 days after the beginning of the second semester of the 2013/14 school year. Shorter delays were experienced for the first semester of the 2014/15 school year (at 17 days on average), although it took 42 days for households with children in large urban schools to receive the subsidy. Delays in transferring the uniform subsidy in cash to households were reported in about one third of the surveyed schools, totalling 23 days on average after the beginning of the semester. Given the small subsidy amount, about 90 per cent of households reported having to spend more on school uniforms because the subsidy they received was insufficient.

Deficiencies in financial transfers and accounting systems are evident at the school level.

Schools experienced problems of assigning funds due to insufficient information accompanying electronic transfers, leading to an increase in fungibility. Financial transfers of the FEP subsidies to schools, made electronically by the OBEC Treasury to school bank accounts, were allocated in bulk, mixed together with other programme funding and without immediate information sent to schools regarding the fund composition of the transfer. This practice led to problems when assigning funds at the school level and to increased fungibility across subsidy categories and programmes.

The financial accounting system at the school level was characterized by a lack of capacity and a weak information management system of FEP funds, both within schools and to higher administrative levels. Given the poor quality of financial records and the lack of a standardized mechanism for schools to account for resource use (either electronic or paper based) and poorly kept records, the data collection of information on the allocated budget and spending was arduous and often imprecise among the sample schools, with systematic errors in accounts evident, due in part from schools not managing their subsidies by category. Poor accounting makes it difficult to assess programme results and efficiency in use at the school level and increases the risk of fund leakage, fungibility or usage not consistent with programme purpose or rules.

About half of the school sample experienced mismatches (positive and negative) between the OBEC Treasury allocation and receipt of the resources. This was most likely explained by school accounting errors and the overall poor quality of schools’ bookkeeping and records. Given these gaps, the OBEC Treasury electronic allocation from the Comptroller General’s Department data was used in the analysis to estimate FEP resources available at the school level.

At the school level, unused FEP funds represented more than 20 per cent of subsidies at the end of the past two fiscal years, amounting to about 8.6 billion baht at the national level ($240.6 million)—and this despite overspending the FEP budget in FY 2013/14. These unused funds should in principle be transferred back to the OBEC Treasury after two years. It is unclear why schools retain these funds over time. Large unused funds can be associated with various shortcomings in school financial management and could reflect the weak accounting system at the school level, inexperience in financial management and weak monitoring by the Educational Service Area Offices (ESAOs).

xvi Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand Executive summary

Other governance and cross-cutting issues

Self-reporting in the context of weak supervision creates moral hazards at the school level.

At the district level, ESAOs had limited supervision capacity and struggled with resource- capacity constraints. In FY 2013/14, the ESAOs conducted on average only one supervision visit per school for FEP monitoring purposes. Accountability was also weak across the government agencies involved in the programme’s implementation.

In the context of weak monitoring, schools faced incentives to misreport self-reported information in order to increase their FEP allocations. ESAOs initially collected the student information required for subsidy calculations, but increased school autonomy in recent years has meant that—except for the boarding student subsidy, which is still based on ESAO information—inputs for subsidy calculations by the Policy and Planning Division are now based on self-reported school information, including student enrolment and student poverty status.

The absence of an integrated information management system across school systems introduces potential problems of ghost students and leakage.

The absence of an integrated data management system across school systems created potential problems of ghost students, distortions in the FEP allocations and resource leakage. The non-integration and absence of data sharing among the two public school systems—one under the jurisdiction of OBEC and the other under local government authority responsibility—and a private primary and secondary school sector under the jurisdiction of the Office of Private Education Commission (which also receive FEP support) created possibilities for ghost (fictitious) students and associated distortions in the FEP allocation and fund leakage. The little information sharing between the three school systems on student enrolment and student lists—compounded by schools’ practice of keeping students on records for some period of time after they have dropped out or moved away (to another school system, private or public)—introduces potential problems, including the double counting of students.

The redundancy of students is amplified by the observed practice in some schools of not discharging non-active students and not reporting their whereabouts. Some school officials reported keeping students on their lists after they had stopped attending school for an extended period of time with the rationale that they may come back. Such practice, which leads to underreported drop-outs and overreported enrolment, could explain the low rate of school drop-outs within the OBEC system, which is often at odds with statistics from other education sources. Schools’ incentive to retain ghost students, especially ‘poor ghost students’, to increase the discretionary subsidy transfers, creates possibilities of resource leakage, given that schools with fictitious students receive more budgetary allocations than what they are otherwise entitled to receive.

Weak social accountability mechanism affects efficiency and equity.

Current limited households’ awareness of the poor student subsidy affects transparency and local accountability and reduces potential impact on education enrolment and retention. Providing information to the community about the poor student subsidy cash transfer and encouraging and formalizing participation could help promote education and increase the enrolment rate among poor households. Targeting all poor households rather than only poor students enrolled in schools would also help increase enrolment of children from impoverished households.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand xvii Executive summary

Raising awareness among the population about the FEP benefits and eligibility is fundamental to increasing the positive impacts. If households could see the increased benefits of sending their children to school, they might more likely choose to enrol them. Although it is difficult to anticipate what incentives would change a household’s perspective and if it would be sufficient to outweigh the cost of sending children to school, their knowledge of such opportunities as the FEB is crucial to their decision-making. Raising awareness about the benefits and eligibility is hence crucial to increase potential FEP impacts. This information would be especially important for poor families whose children tend to be the first to drop out of school or choose not to enrol.

Various factors in the school environment, especially a high rate of teacher absenteeism, affect education quality and student performance.

High turnover of teachers and directors occurred in remote areas, potentially affecting education quality. While teacher allocation across schools is the responsibility of the central ministry, understaffed and overstaffed schools were evident, due largely to the limited number of students enrolled in small rural schools with numerous older teachers and low student-teacher ratios.

Teacher absenteeism was widespread. The PETS findings indicate that about one in twelve teachers in Thailand’s public schools are absent from school on any given school day. The rate of absenteeism from school and from the classroom was calculated through an unannounced visit to 12 teachers randomly selected. Absenteeism is an important factor to take into account, given that teachers’ absences lead to reduced teaching time and education quality, which in turn impact school results or participation rates of students.

Absence from classrooms in the secondary schools was especially striking because teachers were absent from classrooms more than two-thirds of the day among the surveyed schools. In the small urban secondary schools, they were not around for three-fourths of the school day. In the primary schools, teachers were absent from their classroom about one fifth of the time and about one fourth of the time in urban schools.

Various factors could affect teacher absenteeism, including some directly related to administrative requirements associated with the FEP. School personnel and in particular teachers are expected to devote part of their work week managing the implementation of the FEP. The management of FEP subsidies, in particular the poor student subsidy, which involves identifying poor students, verifying their household poverty status and then managing the subsidy and transfer to them, also potentially affects teaching incentives and quality. FEP management left to teachers leads to potential trade-offs between administrative duties and teaching time and could affect absenteeism.

FEP inputs and other school resources are associated with student performance.

The econometric results show that delays in FEP resource transfers to schools, along with teachers’ absence, were associated with lower standardized student test scores. Student performance on the Ordinary National Education Test in five core subjects for Grades 3, 6, 9 and 12 were significantly higher in schools located in urban areas and increased with school size, except among the primary schools, for which medium-sized schools presented the lowest test scores. Average student test scores at all grades were negatively affected by delays in the FEP subsidy allocation and teacher absence. Performance was lower among students in primary schools with a high incidence of poverty, reflecting the insufficient targeting and level of the poor student subsidy.

xviii Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand Executive summary

Policy recommendations and the way forward

FEP design and central-level management issues

Improve vertical equity and efficiency.

Explore (within the Ministry of Education) possibilities of implementing a direct cash transfer programme to poor households, using poverty definition guidelines, to improve the targeting of the poor student subsidy and vertical equity. To overcome problems related to the distribution of resources and targeting to poor households, the Policy and Planning Division likely will need better information about the poverty levels in each school.

Remove or increase the budget allocation for the poor student subsidy by removing or at least increasing the budget thresholds. The current ceilings in the poor subsidy transfers, based on number of enrolled students at the school level, should be lifted to increase vertical equity.

Improve equity of the FEP allocation. The Ministry of Education should provide supplementary funding to (i) schools located in disadvantaged areas facing limited autonomous revenue from the community and (ii) schools with special needs students and/or in schools’ need for additional core curriculum activities and special learning programmes.

Integrate student data lists across the three school systems. This should be a priority to allow verification of students and proper accounting of student enrolment in order to reduce the possibilities of ghost students, overfinancing in the FEP programme and potential leakage of funds. A verification of fictitious students should be done through the verification of the number of students reported in school exams and national examinations, in comparison with the reported number of enrolled students in school records and with the allocated FEP funds.

Make single FEP programme transfers to schools. The OBEC Treasury should stop transferring the various budget allocations in bulk to schools. Detailed information should accompany each fund transfer to facilitate assignment of the FEP funds among the subsidy categories at the school level to reduce the potential reallocation of funds.

Promote increased competition in book procurements. By enhancing the competition in the book procurement market at the national and regional levels, book delays and costs could be reduced. The current requirement of book procurements from an accredited book list should be reconsidered.

Programme implementation issues at the central government and school levels

Improve poverty screening at the school level.

Revise the practices of poverty screening at the school level because they lack monitoring of operations and rigorous evaluation to ensure effectiveness of the FEP as intended. Clear guidelines for determining eligible poor children should be a formalized part of the programme. A better information system should be developed to identify the needy students and schools (those with greater poverty status).

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand xix Executive summary

Improve resource flows.

Improve the budgetary preparation system and introduce specific timelines for the budget management of the various subsidies at the central government level. Specific timelines should be prescribed in the FEP guidelines at the central OBEC level and the Policy and Planning Division for the subsidy transfers to schools to allow the timely availability of resources.

Improve guidelines and introduce timelines for FEP implementation at the school level. FEP guidelines are important for schools to properly manage the FEP funds. It is also important for schools to access official guideline information early, either through electronic or paper-based forms, once funds are transferred.

Improve the accounting system at the school level as well as schools’ financial capacity and the reporting mechanism. Efficient and standardized bookkeeping and a system for information transmission from schools to the higher administrative levels should be put in place, with integration with the Data Management Centre, system to allow for the tracking and reporting of funds received and used.

Introduce guidelines for fund use at the school level and provide training on subsidy use to school administrators to reduce rule interpretations and variance among schools in the provision of subsidies to beneficiaries.

Introduce guidelines and criteria for use of unspent FEP funds at the school level to reduce the moral hazards and uneven discretion by school directors.

Other governance and cross-cutting issues

Improve information and accountability.

Enhance the ESAO supervising role and accountability. Currently, the ESAOs fulfil a limited part of their responsibilities in overseeing, monitoring and supervising the FEP. The ESAOs should emphasize verification of school receipt of FEP funding and monitor FEP spending. To do this, the ESAOs should be given sufficient resources, including trained monitoring and evaluation personnel.

Enhance the transparency of subsidy transfers to households. Receipt of cash transfers to households and school records of subsidy transfers should be enforced at the school level.

Enhance transparency and information to households about the FEP. Improve the dissemination of information to households, including programme objectives and recipients’ obligations and subsidy eligibility, in particular in relation to the poor student subsidy. The better provision of information to households about the programme and subsidy objectives and their obligation should contribute to improving programme outcomes.

Enhance accountability at the school level. Along with increased autonomy of budget and personnel management, public schools should be held more accountable for their education outputs and outcomes. Disclosure of budgetary and student performance information to local communities and parents could hold schools and teachers accountable for their performance.

xx Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand Executive summary

Introduce an annual report on FEP activities, use of the subsidies and results at the school level. An annual report may contribute to increased accountability, transparency and education quality.

Enhance public participation. Raising public participation and awareness could enhance knowledge among households and effectiveness of the programme.

Improve teacher allocation mechanisms and reduce teacher absenteeism.

Enhance teacher management and deployment. Poor aggregate results of student performance are a hotly debated policy topic. In addition to efficiency of FEP resource use, education quality is also affected by various other factors, in particular teaching quality. The distribution of teachers across locations is the responsibility of the central ministry. Small primary schools in rural and remote areas are understaffed and have low teacher retention, both of which affect the quality of the learning experience. Improving incentives and mechanisms to rebalance the distribution of teachers across the country is necessary to improve learning quality.

Reduce teacher absenteeism and improve staff incentives. Reducing teacher absenteeism is fundamental to increasing teaching time and thus improving education outcomes. A way to reduce absenteeism is to link pecuniary and non-pecuniary incentives as well as relocation options with attendance. Procedures should be put in place to reduce the FEP administrative time required of teachers, especially in heavy-poverty areas.

The way forward

Based on the PETS assessment of the FEP resources and access in Thailand, there are several next steps that could be taken to better measure quality and assess school performance, beginning with further research to fill the knowledge gap on issues of efficiency and equity in education in Thailand, such as: • Overall assessment of the FEP, using a PETS on the three parallel primary and secondary school systems (under the jurisdiction of the OBEC, the Local Administration Organizations and the Office of the Private Education Commission) to assess equity and efficiency issues between sectors, compare school quality and student performance and develop best practice learning.

• Development of alternative ways to identify eligible beneficiaries for the poor student subsidy and to transfer the subsidies to poor households.

• Impact evaluation study of the method now in place for targeting poor households for the student subsidy scheme to assess the effectiveness of the cash transfer programme.

• Assessment of education quality, school use of resources and accountability using a Quantitative Service Delivery Survey or in line with the Service Delivery Indicator framework.

• Analysis of factors explaining teachers’ absenteeism and the impacts on education quality.

• Analysis of classroom management and time on task. Improve education quality by understanding teachers’ time allocation in school and classrooms.

• Analysis of small schools’ efficiency, equity and quality and determine incentives and advantages of consolidation at the school and community levels.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand xxi © UNICEF Thailand/2011/Athit 1. Introduction

The Government of Thailand has invested important resources in basic education over the past decades to improve all children’s access to quality basic education. Public spending on education has increased by more than 50 per cent in real terms since 2000 (World Bank, 2010, p. 22). In 2014, it represented 21 per cent of the government budget and nearly 4.1 per cent of gross domestic product (Bureau of the Budget, 2014). And though enrolment in primary and secondary schools has increased in the past decade, there are still barriers to the equitable access to quality education for some children. Indeed, net primary school enrolment remained at slightly more than 90 per cent in 2012 (latest data) and is marked by disparities in access for disadvantaged groups, in particular children from poor households or ethnic minority households, children living in remote areas or with disabilities and migrant children (Tran Ringrose and Shaeffer, 2014, p. 5). Education quality remains an issue, according to national and international test scores that reveal declining education outcomes and wide gaps in performance and knowledge among student groups (Punyasavatsut, 2012, p. 290).

Motivated by the quality issue, UNICEF Thailand, in conjunction with the Ministry of Education, facilitated a Public Expenditure Tracking Survey (PETS) to assess the efficiency and equity of public expenditures in education through the Government’s 15-year Free Education Programme (FEP) by evaluating the services offered to various categories of children.

The FEP was created in 2009 to help reduce the financial burden on households and promote free basic education for all. By fiscal year (FY) 2013/14, the FEP budget amounted to 91.7 billion baht (about $2.6 billion), or 17.7 per cent of education expenditures. The FEP represents the main source of non-wage recurrent public funding to primary and secondary schools. Based on a per-student allocation, funding for three of five subsidy categories is administered by schools (for learning and teaching activities, school books and student development activities), while the other two subsidies (student uniforms and learning materials) are transferred by schools to parents in cash or in-kind. In addition, top-up subsidies cover additional needs for students in special schools or boarding schools and impoverished students in public schools; these subsidies are also transferred to households by schools in-kind or as a cash payment.

The PETS is a multipurpose tool used globally to monitor how much of intended public resources reach intended beneficiaries and to identify bottlenecks in programme implementation so as to diagnose problems in service delivery. By tracking the flow of resources (financial and in-kind) through the various levels of public administration down to schools and households, the PETS follows the allocation of resources to determine financial and institutional constraints and assess if the funds were used as intended. The overall purpose is to promote greater transparency of public resources at the school level and help parents and civil society to hold schools, public administration and government to account.

In Thailand, the PETS looked only at the public school component of the FEP, which is provided through the Office of the Basic Education Commission (OBEC). Although the FEP is also allocated to private and vocational schools, the public school component accounts for 80 per cent of eligible primary and secondary school students, and in 2014, it consumed about 46 per cent of the FEP budget.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 1 1. Introduction

The survey was conducted between January and April 2015 in 24 districts (of 225) in the country, among a sample of 190 primary schools, 50 secondary schools and 10 special and welfare schools. Information was collected from school officials as well as a sample of 1,863 teachers. For financial and other critical data, the survey extended to central government and district-level sources, such as the Government Financial Management Information System, or GFMIS (managed by the Comptroller General’s Department, Ministry of Finance). Information was also collected from parents about the FEP subsidies received from their school to support their children’s education. Through a sample of 2,500 households, the FEP looked at household behaviour and constraints.

The study monitored FEP implementation during FY 2013/14 (which ran from 1 October 2013 to 30 September 2014), which corresponded to the last semester of the 2013/14 school year and the first semester of the 2014/25 school year.

Division of issues within the report This report comprises five chapters. Chapter 2 presents the survey methodology and samples. Chapter 3 presents an overview of the education sector and the FEP. Chapter 4 presents the main findings of the survey regarding potential delays, bottlenecks in implementation and equity issues. It also explores governance aspects of the FEP, focusing on the role of central and district offices as well as teacher absenteeism issues. Using standardized test results, it examines links between the FEP, school quality and student performance. Chapter 5 concludes with a summary and policy recommendations. Further details on the survey methodology are placed in Appendix I, and Appendix IV presents the survey results on welfare schools.

2 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand © UNICEF Thailand/2011/Athit

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 3 บทที่ 1: บทน�ำ

©UNICEF Thailand/2016/Jingjai N. 4 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 2. Public Expenditure Tracking Survey methodology

The PETS is a resource-intensive tool. To diagnose bottlenecks and other types of inefficiencies in a programme, the survey needs to be well designed and carried out; and then the results need to be well disseminated in order to contribute to better accountability, transparency and ultimately improved outcomes.

2.1 The Public Expenditure Tracking Survey approach

The PETS has been applied in about 75 countries over the past two decades and has proven to be a powerful instrument at identifying bottlenecks, inefficiencies and waste in service delivery; in particular, it picks up problems with delays, leakage, information, record keeping, absenteeism, equity, decentralization, user fees and efficiency (Gauthier and Hamed, 2012).

In Thailand, the PETS looked at five elements of the 15-year FEP: i. resources (inputs) mobilized in the programme: their sources and importance (including parents’ contributions); ii. how (process) these resources are mobilized: components, subsidies and allocation mechanisms used and various channels to schools; iii. how (process) these resources are used: expenditure centres and use at the central, decentralized and school levels; iv. inefficiencies and inequities in resource allocation within the programme; and v. results achieved with these resources: intermediate and final outputs and education outcomes.

As noted, the FEP subsidies (per student) are transferred by the OBEC to schools to cover various non-wage recurrent expenditures. Parts of the subsidies are transferred in-kind or as cash to households to cover students’ related needs (uniforms and learning materials). In addition to the basic subsidies, poor students and boarding students receive cash transfers from their school.

Little information is currently collected and reported by schools to the district or central Ministry of Education on the receipt of the subsidies or their use, including by households. The PETS thus provides, on a sample basis, information on subsidy levels and use by schools and households. In doing so, the survey complements the routine Educational Management Information System as well as the education system’s internal evaluations.1

Ultimately, the survey diagnoses potential problems in budget allocation and should lead to a plan of action to improve efficiency, effectiveness and equity of public resources. It also should help enhance the system of recording and reporting at various levels, especially at the school level, to promote better systems of monitoring, accountability and governance of resource flows and use.

1 The PETS is not an audit because it does not reconcile the use of the funds nor try to find missing resources or identify people responsible for issues.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 5 2. Public Expenditure Tracking Survey methodology

2.2 Main sources of information

Information on the FEP derived from two main sources: official data from the OBEC and the PETS findings. Central-level data covered the budget planning process and funds released for the FEP. Data at the decentralized level were collected from schools, district administrations and households, covering receipt and use of subsidies by OBEC schools and in-kind or cash receipts by households. The survey comprised fives modules: 1. school module 2. teacher module 3. absenteeism module 4. household module 5. district administration module.

Module 1 is a school facility questionnaire that was administered to the school director or head of each surveyed facility. The module concerns school characteristics, infrastructure and inputs, receipt of the FEP resources, school expenditures (including transfers to households), governance, supervision activities and perceived problems in the programme and at the school level.

Module 2 is a teacher module administered to 12 teachers in each surveyed school, including the school director, to collect data on teachers’ characteristics. Using the teacher roster, teachers were randomly selected from among all teaching staff. Questions referred to teaching experience, education level, salary, training, job satisfaction and career mobility.

Module 3 is an absenteeism module to calculate the absence rate of teachers from schools and classrooms. An unannounced (second) visit to schools on a day and time when the school is in session allows for verifying absenteeism rates among a random sample of 12 teachers per school. Reasons for absence are also collected from school directors.

Module 4 is a household survey administered to 10 parents chosen randomly from among the student body to collect data on parents’ characteristics and receipt and use of the FEP subsidy. The module comprises questions on household characteristics, income, received transfer of the FEP funds, use of those funds and satisfaction with the programme.

Module 5 is a district administration questionnaire used with the district education head administrator. It comprises questions on district characteristics, budgets, expenditures and supervision activities.

2.3 Sampling

The survey was conducted in 24 districts (of a total 225) among a sample of 190 primary schools, 50 secondary schools and 10 special and welfare schools. The survey sample was based on the list of public schools under the OBEC’s responsibility in each educational service area (which is similar to a school district and referred to as an ESA, with the administrative office referred to as the ESAO). Public schools under the OBEC were the units of observation and a two-stage cluster sample design was employed to select schools. The country was divided into survey collection districts (which overlapped with the education service areas) for the two types of ESAs: primary ESAs and secondary ESAs. In 2014, there were 183 primary ESAs and 42 secondary ESAs. The first sample stage entailed

6 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 2. Public Expenditure Tracking Survey methodology selecting 10 per cent of each type of ESAs to obtain a total of 24 randomly selected ESAs. The second stage entailed choosing 10 schools in each selected ESA. These 10 schools were proportionately chosen to reflect size distribution in the area. Those 240 schools represented about 0.8 per cent of the school population in the country under OBEC responsibility.

In addition, the survey focused on public welfare schools for disadvantaged children and special public schools for children with disabilities, which are also under OBEC responsibility. These schools are not distributed equally across district areas or provinces. In 2014, there were only 51 special schools in 43 provinces and 43 welfare schools in 36 provinces. In the 24 selected ESAs for this study, there were only 13 welfare and special schools. Due to the small population size, 10 schools were selected from among them to ensure relatively meaningful statistics.

Overall, the survey sample of 250 schools thus represents a population of 30,600 OBEC schools. The sample covers 24 ESAs, in which 19 primary ESAs and 5 secondary ESAs were randomly selected. The selected ESAs represent 10 per cent of the ESA population, covering all regions in Thailand.

Table 2.1 shows the number of schools by school size (student population) in each selected primary and secondary ESA. Among the primary ESAs, 52 per cent were small schools (with fewer than 120 students), while the medium (121–600 students) and large (601+ students) schools accounted for 45 per cent and 3 per cent of the sample, respectively. Among secondary ESAs, small schools (with fewer than 500 students) accounted for 38 per cent of the sample, while medium (500–1,499 students) and large (1,500–2,499 students, plus extra-large, which goes beyond 2,500 students) accounted for 33 per cent and 29 per cent, respectively.

Table 2.1: Numbers of surveyed schools in each region, by school size a. Primary educational service area School size1 Region Total Small Medium Large North 34 20 6 60 Central 20 24 6 50 North-East 20 16 4 40 South 17 18 5 40 Total 91 78 21 190 b. Secondary educational service area School size2 Region Total Small Medium Large Extra large North 5 3 1 1 10 Central 5 7 4 4 20 North-East 5 3 1 1 10 South 4 3 2 1 10 Total 19 16 8 7 50

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 7 2. Public Expenditure Tracking Survey methodology c. Special and welfare schools Region No. of schools North 3 Central 2 North-East 3 South 2 Total 10

Note: Primary education: small schools: 1–120 students; medium schools: 121–600 students; large schools: 601+ students. Secondary education: small schools: 1–499 students; medium schools: 500–1,499 students; large schools: 1,500–2,499 students; extra-large schools: 2,500+ students.

Source: Thailand PETS, 2014.

Sample characteristics Tables 2.2 to 2.5 present the queried characteristics of the surveyed schools, households, teachers and ESAOs.

Table 2.2: Main characteristics of the schools in the survey sample

Primary Secondary Total Basic characteristics Number of schools surveyed 190 50 240 Number of small schools 91 19 110 Number of boarding schools 7 5 12 Average number of students 248.9 1,105.2 455.8 Average parent contribution (baht) 1,627 7,361 2,821 Distance Average distance to ESAO (km) 24.6 71.1 32.9 Electricity and IT device Electricity access 99.5% 100.0% 99.6% Have electricity problem 25.8% 64.0% 30.4% Average number of computers per student 0.1 0.1 0.1 Average number of tablets per student 0.1 0.2 0.1 Internet access 97.4% 98.0% 98.3% Good state-provided internet service 58.4% 58.0% 58.3% Infrastructure Have drinking water problem 52.1% 44.0% 50.4% Percentage of girl toilets in school 50.6% 60.9% 52.8% Students Percentage of poor students 29.2% 16.0% 26.4% Percentage of minority students 5.5% 0.5% 4.4% Percentage of registered foreign students 4.9% 0.4% 3.9% Percentage of unregistered foreign students 4.6% 0.2% 3.7% Books Schools with newspapers for students 67.9% 92.0% 74.6% Average number of books in library 2,980 16,913 5,883

8 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 2. Public Expenditure Tracking Survey methodology

Primary Secondary Total Rooms and classes Average number of classrooms 12.7 30.0 16.5 Pre-primary class size 16.4 16.4 Primary class size 18.0 18.0 Secondary class size 33.1 33.1 Teacher Average number of teachers 17.2 62.7 26.6 Average student-teacher ratio 14.2 16.2 14.6 Percentage of teachers absent from school 8.8% 5.0% 8.0% School director Average years of experience in this school 6.1 2.2 5.3 Average years of experience as school director 14.1 11.6 13.9 Average years of total experience as civil servant 30.4 31.8 30.7

Source: Thailand PETS, 2014.

Table 2.3: Main characteristics of the households in the survey sample

Rural Urban All Number of sample households 1,420 1,080 2,500 Female respondents 80% 80% 80% Number of ethnic minority households 6% 6% 6% Households receiving poor student subsidy 53% 53% 53% Average age of household head 45 46 45.5 Average household size 4.7 4.6 4.6 Average number of children attending 1.7 1.6 1.68 school per household Average education level of parent 7.3 7.5 7.4 respondent (years) Average monthly income (baht) 8,520 8,911 8,660

Source: Thailand PETS, 2014.

Table 2.4: Main characteristics of the teachers and school administrators in the PETS sample

Secondary Primary schools All schools Number of sample teachers 1,863 600 2,463 Percentage of female teachers 70.4% 29.6% 70% Average age 47.7 45.2 47 Married 73% 64% 71% Master’s degree or higher 11.3% 14.8% 12% Average number of years of experience 20.2 16.5 18.9 Average monthly salary 36,535 34,739 35,657 Average school absence (days) 9 7.5 8 Average teaching hours per week 15.4 14 15

Source: Thailand PETS, 2014.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 9 2. Public Expenditure Tracking Survey methodology

Table 2.5: Main characteristics of the sampled Educational Service Area Office

Mean Maximum Minimum Number of students 31,760 119,544 10,571 - Pre-primary 4,093 8,017 1,781 - Primary 15,209 30,941 7,499 - Lower secondary 8,906 61,456 1,137 - Upper secondary 6,223 58,088 34 Service area (sq km) 4,131 18,654 506 Longest distance to school (km) 33.5 99 40 No. of schools under supervision - Primary ESAO 137 228 49 - Secondary ESAO 54 67 27 Total budget (million baht) per district 8.4 9.2 7.8 - Administrative budget 5.4 6.2 4.8 - Development budget 3 3 3

Source: Thailand PETS, 2014.

2.4 Scope of the study

As explained previously, the scope of the PETS in Thailand was on the 15-year Free Education Programme and covered only public schools under OBEC responsibilities, from pre-primary to secondary schools, as well as the special and welfare schools for disadvantaged students. Hence, the study does not encompass private and vocational schools also under OBEC jurisdiction or public schools under the responsibility of the Local Administrative Office (the administrative tier of government below the district level and referred to as a LAO). The FEP also provides subsidies to private and vocational schools as well as LAO schools, but those subsidies are allocated through other government agencies and with different rules and implementing processes than those under OBEC jurisdiction.2 The choice of scope for this study was made to limit the analysis to schools under OBEC responsibility, which represented about 80 per cent of primary and secondary school students in Thailand and 46 per cent of the FEP budget in 2014.

In addition to analysis of the efficiency and equity in the transfer and use of the FEP resources, the study encompassed an assessment of staff incentives and a measurement of teachers’ school and classroom absenteeism. The study also looked at the levels and timing of resources received by households and their use of the subsidies.

Using students’ test score results on standardized national tests, the study also examined links between the FEP and other resources available to schools and education performance. Although the FEP represents the main source of non-wage recurrent funding to schools and subsidies to households, various other Ministry of Education programmes cover recurrent expenditures (such as teachers’

2 Private schools are entitled to receive 100 per cent of FEP subsidies, plus 70 per cent of all teachers’ salaries. Such sub- sidies are allocated and managed through a different Ministry of Education agency, OPEC. Private schools that receive partial subsidies can impose an additional school fee to cover their operating costs. Public schools under local government authorities are under the jurisdiction of the Ministry of Interior.

10 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 2. Public Expenditure Tracking Survey methodology wages and utility costs) and investments. Thus, it is difficult to attribute direct causality to the 15-year programme with regard to school outputs or students’ learning results.3

2.5 Data collection and verification

The survey was conducted between January and April 2015 in 24 districts. The PETS data collection team comprised 50 trained enumerators who participated in a pre-test survey prior to data collection. Enumerators were ESA officers with long experience in school finance and institutional structures. Using ESA officers was assumed as not presenting any conflict of interest because the FEP budget is directly transferred to each school’s bank account. The benefit of making use of officers who are well aware of the programme’s structure was viewed as outweighing potential objectivity issues. Still, various measures were taken to mitigate potential problems, including the random verification of collected data by the central research team who visited schools and households.

In each ESA in the survey sample, two enumerators were responsible for data collections from 10 schools and 100 households. The enumerators visited schools and households three to five times during the three-month survey period. Households were selected randomly by the enumerators from a school’s parent list. The enumerators’ responsibility encompassed administering all the PETS modules through announced school visits, except the teacher absenteeism questionnaire, which was administered through an unannounced visit to measure teacher absence from schools and classrooms.

Field monitoring visits were conducted in all regions during and following the survey implementation. Schools and households were randomly selected by the central research team for a site visit that lasted two to three hours. During those monitoring visits, the school director and teachers in charge of the FEP were interviewed about the rationale and understanding of guidelines and regulation of the FEP spending. The school visits included discussion on the ESAO role in FEP implementation and governance. The household visits followed the school visits. The field monitoring trips proved informative and helped the research team identify crucial issues relating to potential FEP leakage and misuse.

Data verification, data entry and cleaning Data verification proved crucial but time consuming. When data inconsistencies were detected, the research team contacted the corresponding enumerator for verification. The primary issues detected centred on accounting balances of the FEP at the school level and incomplete questionnaires.

Once verified, data were inputted by a trained data entry team. Entries were double-checked to ensure accuracy. Data cleaning was then conducted using Stata. Quality and coherence of the PETS data were also ensured by triangulating with the Ministry of Education database, OBEC Treasury data and GFMIS data from the Ministry of Finance.

3 Various institutional arrangements or practices could affect basic education accessibility and quality, such as the unofficial practice of not allowing grade repetition in primary and secondary schools in order to increase enrolment, although it leads to poor average student test results.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 11 © UNICEF Thailand/2011/Athit 12 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 3. Thailand’s education sector and the 15-year Free Education Programme

This chapter describes the education system in Thailand and the role of the Ministry of Education and, more specifically, the OBEC, which manages the FEP for schools under its responsibility. The discussion then goes into detail with the objectives, importance and means of the FEP under the OBEC.

3.1 Thailand’s education system organization and public expenditure

Thailand’s education sector is based on the 2007 Constitution and the 1999 National Education Act. The Constitution states that all Thai citizens have an equal right to receive free quality basic education for at least 12 years. The National Education Act (with a 2010 amendment) obligates the Government to provide general subsidies for the basic education provision in both public and private schools. The free basic education provision covers pre-primary, primary and secondary education. Compulsory education is nine years, enforcing the enrolment of all children at the lower secondary level.

Among many ministries (such as the Ministry of Interior, the Ministry of Tourism and Sports and the Ministry of Culture), the Ministry of Education is responsible for promoting and overseeing all levels and types of education, formulating education policies, setting plans and standards, mobilizing resources and monitoring and evaluating education providers.

Public basic education is administered and managed centrally, subnationally and within schools. At the central level, OBEC is responsible for formulating basic education policies, work plans, standards and core curricula, mobilizing resources, monitoring and evaluation and promoting teaching innovation. The Policy and Planning Division of OBEC is responsible for budget allocations among public schools.

At the subnational level, two major administrative bodies operate as intermediate units: the ESAOs, under the jurisdiction of the Ministry of Education, and the LAOs, under the Ministry of Interior. The ESAOs were established to manage education services at a decentralized level. Each ESAO is responsible for overseeing, monitoring, evaluation and dissolution of basic education schools; coordinating and promoting private schools in the area; coordinating management of education providers; and allocating budgets to schools in their area. Each ESAO is administered by an Area Committee for Education. The committee involves representatives from the community, the LAO, the teachers’ association, the educational administrator association, the parents’ association and education scholars. In 2014, there were 183 ESAOs for primary education provision and 42 ESAOs for secondary education provision.

LAOs can be divided into four types: provincial administration offices, municipalities, subdistrict administrative offices and special local administrative authorities, such as the Bangkok Metropolitan Administration and Pattaya City Administration.

At the basic education level, each school is responsible for its own administration and management, including academic matters, budgets, personnel and general affairs. It is monitored by a board consisting of representatives of parents, teachers, community groups, school alumna, scholars and the LAO.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 13 3. Thailand’s education sector and the 15-year Free Education Programme

The private sector also provides education services at all levels and school types. The Ministry of Education oversees the administration and management of private education institutions and monitors their quality and standards.

Fund flow and resource envelope in the basic education system The largest share of the education budget is allocated to basic education, covering pre-primary, primary and secondary education. In 2014, the budget for basic education represented 74 per cent of the education budget, or 3 per cent of the country’s gross domestic product (GDP). About 15 per cent of the total education budget was allocated to higher education and the remaining portion covered other support services for education (see Table 3.1).

In FY 2013/14, the OBEC budget amounted to 307 billion baht, accounting for 64 per cent of the Ministry of Education’s budget. Within the budget for basic education under the OBEC, 73 per cent was allocated to staff salaries and 14 per cent to school subsidies. The share of capital expenditures remained low in the fiscal year, at around 2.5–5.5 per cent (see Table 3.2).

The OBEC has responsibility for the majority of basic education students in public schools, which in 2014 totalled 7.1 million.

Among the programmes implemented by OBEC, the 15-year FEP is by far one of the most important in terms of budget spending. The programme entails budget subsidies covering schools’ recurrent operating costs (excluding personnel expenses) and household income transfers on a per-student basis.

Table 3.1: Education budget, by levels of education, 1999–2014 (million baht)

Education Basic Supporting Unspecified Year % Tertiary % % % budget education services and others 1999 207,317 140,724 67.88 35,543 17.14 22,541 10.87 8,509 4.10 2000 220,621 147,858 67.02 34,482 15.63 28,981 13.14 9,299 4.21 2001 221,592 150,926 68.11 32,762 14.78 28,092 12.68 9,812 4.43 2002 222,990 151,924 68.13 31,913 14.31 29,047 13.03 10,106 4.53 2003 235,444 162,998 69.23 33,348 14.16 28,868 12.26 10,231 4.35 2004 251,234 179,721 71.54 33,480 13.33 29,446 11.72 8,587 3.42 2005 262,722 184,405 70.19 40,132 15.28 30,705 11.69 7,480 2.85 2006 295,623 204,011 69.01 48,096 16.27 33,631 11.38 9,886 3.34 2007 355,241 245,489 69.10 58,444 16.45 39,942 11.24 11,366 3.20 2008 364,634 253,509 69.52 67,011 18.38 33,212 9.11 10,901 2.99 2009 419,233 281,571 67.16 72,059 17.19 53,667 12.80 11,937 2.85 2010 379,125 282,212 74.44 62,604 16.51 22,472 5.93 11,837 3.12 2011 422,240 310,330 73.50 71,750 16.99 22,747 5.39 17,413 4.12 2012 444,484 338,758. 76.21 73,821 16.61 16,455 3.70 16,493 3.71 2013 493,893 367,010 74.31 83,326 16.87 22,276 4.51 21,280 4.31 2014 518,519 383,557 73.97 87,722 16.92 23,509 4.53 23,731 4.58

Source: Bureau of the Budget, various years.

14 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 3. Thailand’s education sector and the 15-year Free Education Programme

Table 3.2: OBEC education budget, by spending categories, 2010–2014 (million baht)

Categories 2010 2011 2012 2013 2014 Personnel expenses 170,072 178,340 213,910 215,004 224,886 (75.56%) (71.18%) (74.60%) (73.06%) (73.20%) Operating expenses 8,927 15,504 17,347 25,109 25,470 (3.97%) (6.19%) (6.05%) (8.53%) (8.29%) Capital expenses 5,751 13,708 14,002 10,164 13,132 (2.56%) (5.47%) (4.88%) (3.45%) (4.27%) Subsidies (including 40,293 41,111 40,725 43,514 43,292 FEP) (17.90%) (16.41%) (14.20%) (14.79%) (14.09%) Other expenses 40 1,875 743 508 432 (0.02%) (0.75%) (0.26%) (0.17%) (0.14%) Total budget 225,083 250,539 286,727 294,299 307,211 (100%) (100%) (100%) (100%) (100%)

Source: Bureau of the Budget, various years.

National education budget The Thai education system is mainly financed by the national budget. The education sector receives the largest share of the total budget, representing more than 20 per cent of the national budget since the education reforms of 1999, with a few exceptions. The education budget has remained of considerable size over the years, representing about 4 per cent of GDP (see Figure 3.1).

Figure 3.1: Education budget, 1999–2014 (%)

30.0

25.1 25.7 24.4 25.0 23.6 22.7 22.3 21.8 21.6 21.7 22.0 21.5 21.0 20.6 20.5 19.5 20.0 18.7

15.0

10.0

4.5 4.5 4.3 4.1 4.0 4.2 4.0 4.6 4.0 4.1 5.0 3.9 3.7 3.8 3.8 3.8 3.9

0.0 2011 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2012 2013 2014

Percentage of GDP Percentage of Total Budget

Source: Bureau of the Budget, various years. Source: Bureau of the Budget, various years.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 15 3. Thailand’s education sector and the 15-year Free Education Programme

3.2 Free Education Programme: Background, objectives and rationale

Background Section 3(49) of the 2007 Constitution stipulates that “all Thai people have an equal right to receive basic education of quality for at least 12 years and free of charge”. The National Education Act, with its 2010 amendment, redefined the way the budget is allocated to support basic education provision. Section 60(1) obligates the State to provide general subsidies for per-student expenditures for compulsory and basic 12-year education provided by public and private educational institutions.

The National Education Act requires that financing be on a per-student basis and that financial management be decentralized. The financing of school operations through per-student subsidies started in 2002 and has since expanded in terms of budget coverage, academic years of coverage and ways of financing management. Initially, per-student subsidies aimed to cover only school operating expenses, excluding the personnel budget. In 2009, the Government initiated the Free Education Programme with Quality Policy. The FEP policy has remained, although under various other names.

The FEP policy extended coverage of the basic education provision from 12 to 15 years by covering three additional years at the pre-primary level. The FEP thus supports basic education from pre- primary to upper secondary, including a vocational track. Both Thai and non-Thai students are eligible for subsidies as well as public and private schools.

Free education goals

The FEP policy helps support the second decade of educational reform (2009–2018), which has four goals: to reduce the spending burden by parents, to improve education access, to improve learning quality and to promote people participation in education provision and management.

Source: Ministry of Education, 2009.

The FEP policy, in particular, helps to lessen parents’ financial burden by providing education support for their children. It covers (i) free textbooks in the main subjects, from pre-primary to upper secondary education; (ii) free school uniforms and learning materials; and (iii) supplementary expenses that schools request parents to cover activities, such as boy and girl scouts, internet access, computer learning, sports and field trips.

The FEP policy initially was perceived as controversial. It was unclear if public schools could request supplementary funding from parents once the schools had received the FEP subsidy. It then became apparent that the Government could only guarantee a minimum standard of free basic education provision. FEP subsidies were aimed at providing basic learning according to the national curriculum. To allow for more flexibility in school management, schools were allowed to impose additional school fees when providing services beyond the basic curriculum, such as English programmes or special skill learning. These additional expenses, however, must be approved by the school board and have parents’ consent. Hence in practice, schools still collect additional resources from parents and communities, which prove substantial, especially for schools in an urban location.

The FEP is administered by several government agencies. OBEC manages the activity targeting public school students, while the Office of Private Education Commission (OPEC), another agency

16 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 3. Thailand’s education sector and the 15-year Free Education Programme of the Ministry of Education and under the Office of Permanent Secretariat, oversees the FEP activity among private schools. Publicly provided basic education is also partly managed by the Office of Higher Education Commission, local government authorities under the Ministry of Interior and the Ministry of Culture, and other independent public agencies. Budget support to the FEP under the various agencies is based on the per-student subsidies. Such subsidies are given to public and private schools at the same rate, which varies with grade levels.

Table 3.3 illustrates the FEP total budget allocation for FY 2013/14 and the respective amount and share managed by OBEC and other agencies. OBEC’s share was the largest in the programme, accounting for 45.5 per cent. The second-largest share went to the Office of the Permanent Secretary, which includes school subsidies for private general education and for vocational education. Public vocational education is under the Office of the Vocational Education Commission. General and vocational education provisions are subsidized through different schemes and thus cannot be compared.

Table 3.3: FEP budget allocation, FY 2012/13 and FY 2013/14 (million baht)

FY 2012/13 FY 2013/14 Source Amount % Amount % Ministry of Education 82,859 93.22% 85,544 93.33% Office of the Permanent Secretary* 35,879 40.37% 38,697 42.22% Office of the Basic Education Commission 41,893 47.13% 41,731 45.53% Office of the Vocational Education Commission 4,694 5.28% 4,721 5.15% Office of the Higher Education Commission** 18 0.02% 16 0.02% Ministry of Interior 4,616 5.19% 4,601 5.02% Department of Local Administration 3,268 3.68% 3,319 3.62% Bangkok Metropolitan Administration 1,306 1.47% 1,238 1.35% Pattaya City Administration 43 0.05% 44 0.05% Ministry of Culture 87 0.10% 87 0.10% Independent public agencies 1,319 1.48% 1,426 1.56% Total 88,881 100 91,659 100 % of Ministry of Education budget 18.0 17.7

Note: *=Private vocational and general education schools are supervised by the Office of the Private Education Commission. **= For primary and secondary schools operated by universities. Source: Bureau of the Budget, various years.

As noted, the scope of the study was limited to public schools under OBEC jurisdiction due to the broad coverage of the FEP (children in general basic education under OBEC management totalled about 7.1 million in 2014, representing more than 80 per cent of eligible students).

Table 3.4 details the OBEC’s 15-year Free Education Programme during the fiscal years between 2009 and 2014. The FEP under the OBEC management amounted to 41,730 million baht in FY 2013/14, representing 13.6 per cent of the total OBEC budget. The FEP consists of five components. The three major components of the FEP, covering learning and teaching activities, books and student development activities, and are administered by each school, while the remaining components— student uniform and learning materials—are to be transferred to parents in cash. The components administered by schools represent 86 per cent of the FEP budget.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 17 3. Thailand’s education sector and the 15-year Free Education Programme

Table 3.4: OBEC’s Free Education Programme budget, FY 2009/10–FY 2013/14 (million baht and %)

Components FY 2009/10 FY 2010/11 FY 2011/12 FY 2012/13 FY 2013/14 Learning and teaching activities 25,1146 26,671 25,477 25,223 25,276 % 62 64 60 60 60 Books 3,812 3,624 5,932 5,641 5,556 % 9 9 14 13 13 Student uniforms 3,250 3,221 3,098 3,053 2,995 % 8 8 7 7 7.18 Learning materials 3,125 3,082 2,982 2,950 2,922 % 8. 7 7 7 7 Student development activities 5,303 5,254 5,063 5,026 4,981 % 13 13 12 12 12 Total 40,605 41,855 42,553 41,893 41,731

Source: Policy and Planning Division, OBEC (various years) and the Operational Guidelines for the 15-year Free Education Programme, various years.

Before 2009, OBEC school funding was allocated through the ESAOs in block grants, which were then transferred to schools, based on the number of students. In 2009, the FEP school subsidies were transferred directly to school bank accounts. The ESAOs maintain a supervisory role, monitoring the number of students within their jurisdiction and FEP implementation. The planning and allocation by OBEC of the FEP budget directly to schools requires that information on the number of students be updated twice a year, after each semester begins.

Compiling and verifying the number of students in OBEC schools around the country have been difficult tasks for the OBEC Policy and Planning Division. Large numbers of schools are located in remote areas, and some still lack electricity and have limited internet connection. In addition, students often leave or relocate without notifying the school about their destination or reason for absence. Recent improvement in student data management has helped the Policy and Planning Division cope with such difficulties. A new data management centre, through which schools must submit student data online, was developed to improve accuracy, transparency of budget use and efficiency in budget transfer to schools.

Objectives and rationale of the FEP Since its inception in 2009, the FEP aims to expand education access for all population groups, including students who are poor, disadvantaged or living with a disability or from ethnic minority households, thereby improving the equity and equality in opportunity. The programme has additionally sought to reduce parental burdens by helping support their children’s education, to improve learning quality and to enhance participation from all stakeholders. All parents, rich and poor, receive an income transfer (of the same amount) from the government through the basic FEP subsidies to spend on school uniforms and leaning materials. Other subsidies under the programme covering books and student learning activities are managed by the schools. The FEP accounts for poverty levels, allocating larger subsidies to poor households through the additional (top-up) subsidy to poor students. Justification for the FEP derives from the Constitution, which stipulates free basic education provision with quality for all citizens.

18 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 3. Thailand’s education sector and the 15-year Free Education Programme

Organization of the FEP at the ministry level The FEP budget transfer to public schools under the OBEC involves the OBEC Policy and Planning Division, the ESAOs and schools and is deposited directly into each school’s bank account. Figure 3.2 illustrates the flow of information and the FEP budget.

Figure 3.2: Budget and information flows under the FEP

Bureau of the OBEC Treasury Budget

(3) (1)

OBEC Policy and (4) Planning Division (6) Educational (2) (5) service (7) areas Primary and secondary schools (8) (9)

Information flow Households Cash flow

Source: Thailand PETS, 2014.

The relationships outlined in Figure 3.2 are as follows: • The Budget Bureau informs the Policy and Planning Division about the FEP budget envelope to OBEC. • Schools inform the Policy and Planning Division about the numbers of eligible students for each subsidy component. • Following verification of the number of students, the Policy and Planning Division sends a budget petition to the OBEC Treasury. • The OBEC Treasury processes the budget request and disburses funding to schools. • FEP budgets (and others) are electronically transferred to school bank accounts; the Policy and Planning Division notifies schools about the FEP instalment through electronic filing, available on the OBEC web page. • The Policy and Planning Division sends notification of school budgetary details to each ESAO. • The ESAOs send documents with details of the allocated budget to schools. • Schools verify details of the allocated budget and return a receipt to the ESAOs. • Schools make disbursements from their bank account to support their operations and to provide the FEP subsidies to households through cash or in-kind transfers.

Under the current management practices, the ESAOs are responsible for carrying out administrative tasks relating to basic education provision but are not involved in administering or allocating FEP resources to schools. During the budget planning process, each ESAO verifies the requested resource amounts and oversees the appropriate use of school funds within their jurisdiction. Of all the FEP subsidies, the ESAOs remain active at requesting and disseminating only the boarding student subsidy

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 19 3. Thailand’s education sector and the 15-year Free Education Programme to schools. OBEC schools have full authority and independence to spend FEP subsidies within their guidelines.

Allocation rules: General subsidies and poor student transfers School subsidies for teaching and learning activities have been allocated to public and private schools since 2002. The subsidy scheme for public schools entails only non-salary expenditures at a flat rate, differentiated by grade level and student needs. The subsidy amount is expected to cover the basic operating expenses of schools. The Government also allows private schools to collect additional fees from students, but these should not exceed limits specified by the Ministry of Education. Additional fees are also allowed for public schools to improve the quality of education and to cover some school costs (foreign language teachers, computer facilities and public utilities). Subsidy rates have periodically increased since implementation of the per-student school subsidy programme.

Since 2002, there have been two substantial adjustments in the per-head subsidy rates, in 2007 and 2009. The 2007 adjustment was made to reflect increased school operating costs and thus ensure learning quality, such as the procurement of computers, utility services and student learning activities.

Since 2009 (with the FEP), schools have received additional subsidies for textbook procurement and for student development activities, while cash is transferred to parents to acquire learning materials and uniforms for their children.

Table 3.5 describes the allocating criteria under the FEP, which consists of five components, varied by levels of education and supplementary needs: learning and teaching activities, books, uniforms, learning materials and student development activities. These main school subsidies are designed to ensure horizontal equity of access to opportunities for all young people.

In addition, school subsidies are differentiated by student supplementary needs through the top-up subsidies. These additional subsidies under the FEP cover expenses for the special and welfare education schools, poor students’ needs, food costs for boarding students and small schools (see Table 3.6).

Table 3.5: Per-student subsidies under the 15-year Free Education Programme, 2014 school year (baht per student)

Secondary Education levels Pre-primary Primary Secondary school general education Basic subsidy 1,700 1,900 3,500 3,800 Books* 200 433 669 897 Learning materials 200 390 420 460 Uniforms 300 360 450 500 Student development 430 480 880 950 activities Total 2,830 3,563 5,919 6,607 Poor student subsidy 1,000** 3,000*** Boarding student subsidy 5,300 5,300

Note: *=Average of corresponding grade levels. **=up to 40% of the total primary school students; and ***=up to 30 per cent of the total secondary school students. Source: Bureau of the Budget.

20 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand - - 20 380 Non- 5,500 5,900 2,950 boarding - - disabilities 500 Students with 1,200 9,850 18,000 19,700 Boarding - - - - Non- 5,500 5,500 2,750 boarding Upper secondary schools students - - 500 Disadvantage 1,200 9,850 18,000 19,700 Boarding - - 20 380 Non- 5,500 5,900 2,950 boarding disabilities 20 500 380 Students with 1,200 18,000 20,100 10,050 Boarding - - - - Non- 5,500 5,500 2,750 boarding Lower secondary schools students - - 500 Disadvantage 1,200 9,850 18,000 19,700 Boarding - - 30 590 Non- 5,500 6,120 3,060 boarding disabilities 30 500 590 Students with 1,200 18,000 20,320 10,160 Boarding - - 30 590 Non- 5,500 6,120 3,060 Primary schools boarding students - 500 200 Disadvantage 1,200 9,950 18,000 19,900 Boarding - - 30 590 Non- 5,500 6,120 3,060 boarding disabilities 30 500 590 Students with 1,200 18,000 20,320 10,160 Boarding - - 30 590 Non- 5,500 6,120 3,060 boarding Pre-primary schools students - 500 200 Disadvantage 1,200 9,950 18,000 19,900 Boarding Items Uniforms Personal items Electricity expenses Food Utility expenses Per term Per year Types Types Welfare Welfare and special schools Source: Policy and Planning Division, OBEC (various years) Operational Guidelines for the 15-year Free Education Programme. Table 3.6: Top-up subsidies for welfare and special schools under the 15-year Free Education Programme Top-up 3.6: Table

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 21 ©UNICEF Thailand/2015/Suracheth Prommarak. 22 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 4. Budget allocation, release and spending in the Free Education Programme

This chapter looks at the efficiency of the FEP budget allocation and release process to schools as well as schools’ use of the subsidies. The discussion first examines the budget process at the central- level OBEC, which involves the Policy and Planning Division and the OBEC Treasury, and then examines the duration of the process and potential delays as well as budget execution rates. The chapter wraps up with a focus on school receipt and management of FEP resources, examining each of the five FEP categories, to determine use levels and respect of the guidelines, in particular at the household level.

4.1 Budget process: Delays in budget transfers

Delays in budget transfers The FEP annual budget envelope is determined before the beginning of the fiscal year by the Bureau of the Budget of the Prime Minister’s Office. The overall envelope responds to the expected number of primary and secondary students and the levels of per-student subsidies adjusted by grades.

Based on this announced envelope by the Bureau of the Budget, the OBEC Policy and Planning Division determines the FEP budget envelope for each school under its responsibility. These FEP school subsidies, detailed by categories of subsidy, are contained in budget petitions sent to the OBEC Treasury over the course of the fiscal year that runs from 1 October to 30 September.4 Once it has received the Policy and Planning Division petitions, the OBEC Treasury allocates the FEP resources to schools through direct electronic bank transfers.

Policy and Planning Division budget petitions are managed in two stages during the fiscal year. The first stage of FEP budget management covers the first quarter of the fiscal year (1 October through December), which in this study corresponded to the second semester of the 2013/14 school year. The second stage covers the remaining period of the fiscal year (January to September), which corresponded to the first semester of the 2014/15 school year.

During each stage (school semester), the FEP general per-head subsidy is allocated to schools in two instalments: the first is a 70 per cent allocation, followed by a 30 per cent adjustment. The other subsidy categories of the programme for poor students and boarding students are allocated only once in each stage.

Given that the FEP guidelines do not provide an official timeline for Policy and Planning Division management for this early stage of the FEP budget process, a tentative timeline threshold based on actual receipt by the Policy and Planning Division of information required to initiate budget petitions was used to estimate potential delays. Table 4.1 summarizes the estimated delay by the Policy and Planning Division in processing the FEP budget petitions in each stage, by category of subsidy.

4 The primary and secondary school year runs from May (generally 16 May) to April.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 23 4. Budget allocation, release and spending in the Free Education Programme

Stage 1: Second semester of the 2013/14 school year In stage 1, the starting date for the Policy and Planning Division general subsidy’s 70 per cent- instalment was 15 October 2013, which corresponded to the Policy and Planning Division’s actual receipt of the FEP budget envelope from the Bureau of the Budget. After receiving these budget figures, it took the Policy and Planning Division 28 days to send the detailed school allocation petition to the OBEC Treasury for the first 70 per cent instalment (see Table 4.1). Given that the second semester started on 1 November, this delay in transmitting the first 70 per cent allocation instructions to the Treasury could be considered relatively lengthy, arriving two weeks after the beginning of the semester.

The starting date for the Policy and Planning Division general subsidy’s 30 per cent adjustment for the second semester of the 2013/14 school year was 30 November, the deadline for schools to transmit their revised student numbers to OBEC. It took the Policy and Planning Division about one week to verify the student enrolment data for possible redundancies (students’ names appearing in more than one school) and then another week to send the petition to the OBEC Treasury. Despite the two-week duration, this step could be seen as relatively timely, given that the 30 per cent instalment is meant to adjust the subsidy to the actual number of students registered in the second semester.

For the poor student subsidy, the Policy and Planning Division took about a month to send the budget petition to the OBEC Treasury. This relatively long period of time could be explained in part by the political turmoil in Bangkok at that time, which required the Policy and Planning Division staff to work away from their office.

For the boarding student subsidy process, the starting date was 10 November, when the Policy and Planning Division was due to receive the ESAO verification reports, based on boarding schools’ own reporting. In the first stage, the Policy and Planning Division process was relatively timely, considering it took only nine days for the Division to analyse the information and send the budget petition to the OBEC Treasury for the subsidy transfer.

Stage 2: First semester of the 2014/15 school year During stage 2, corresponding to the first semester of the 2014/15 school year, the starting date of the Policy and Planning Division budget process was 30 December, when the FEP budget envelope was announced by the Bureau of the Budget, at the end of the first quarter of the fiscal budget cycle. At this point, the Policy and Planning Division needed to make use of the student enrolment estimates for the next academic year and assumptions on new student intakes to determine the budget petition for the first tranche of the FEP general subsidy. It took the Policy and Planning Division 32 days to release the budget petition to the Treasury. While slightly longer than in stage 1, it was still several months before the beginning of the next school year, in June. However, although the whole amount of per-head general subsidy may not be used before the beginning of the school year, schools may need to have access to the FEP funding to procure books, uniforms and learning materials in time for the beginning of the semester in June. Schools tend to do their book orders around March and thus pay a deposit to publishers in April. Several schools reported spending the FEP general subsidy before the first day of school.

24 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 4. Budget allocation, release and spending in the Free Education Programme

For the general subsidy 30 per cent instalment, the starting date was 20 June, allowing 10 days for OBEC to verify schools’ revised student number to be submitted on June 10 according to FEP guidelines. After receiving the revised student figures for the first semester, the Policy and Planning Division took 12 days to transmit the budget adjustment petition to the Treasury.

The poor student subsidy followed the 30 per cent instalment process and experienced the same duration for the Policy and Planning Division petition. The boarding student subsidy petition took about 40 days to be processed by the Policy and Planning Division during stage 2, after the information was received from the ESAO, which appears unusually long.

Table 4.1: Delays in budget petition by the Policy and Planning Division

Stage 1 (semester 2 of 2013/14 school year) Stage 2 (semester 1 of 2014/15 school year) Policy and Policy and Duration Planning Planning Subsidy from starting Starting Division Division Duration categories date to Starting date date petition sent petition sent (days) petition date to OBEC to OBEC (days) Treasury Treasury General 15 Oct. 2013 12 Nov. 2013 28 30 Dec. 2013 31 Jan. 2014 32 subsidy 70% General 30 Nov. 2013 14 Dec. 2013 14 20 Jun. 2014 2 Jul. 2014 12 subsidy 30% Poor student 30 Nov. 2013 13 Jan. 2014 44 20 Jun. 2014 2 Jul. 2014 12 subsidy Boarding student 10 Nov. 2013 19 Nov. 2013 9 25 May 2014 4 Jul. 2014 40 subsidy

Source: Thailand PETS, 2014.

Overall delay in FEP subsidies received at the school level Table 4.2 presents the time it took the FEP subsidy to transfer from the Policy and Planning Division to schools, via electronic transfer from the OBEC Treasury to their individual bank accounts. For the budget petition process at the central level, there was no specific timeline in the FEP guidelines for the subsidy transfer to schools. The starting dates in Table 4.2 are the start dates for each subsidy process, and the ‘school receipt date’ corresponds to the date of the electronic transfer at the school level.

In stage 1 (second semester of the 2013/14 school year), it took an average of 50 days for the FEP general subsidy’s 70 per cent tranche to be received at the school level. The overall duration of the general subsidy’s 30 per cent adjustment was even longer, at 72 days on average. The same overall delay was observed for the poor student subsidy.

During stage 2 (first semester of the 2014/15 school year), shorter delays occurred among the various subsidies received by schools, except for the boarding student subsidy, which took an average of two months to be received.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 25 4. Budget allocation, release and spending in the Free Education Programme

Table 4.2: Delay of school receipt of FEP resources

Stage 1 (semester 2 of 2013/14 Stage 2 (semester 1 of 2014/15 school year) school year) Subsidy Duration from start- categories Starting School re- Starting School re- Duration ing date to date ceipt date date ceipt date (days) receipt date (days) General 15 Oct. 2013 4 Dec. 2013 50 14 Feb. 2014 12 Mar. 2014 11 subsidy 70% General 20 Nov. 2013 11 Feb. 2014 72 20 Jun. 2014 25 Jul. 2014 35 subsidy 30% Poor student 30 Nov. 2013 10 Feb. 2014 72 20 Jun. 2014 25 Jul. 2014 35 subsidy Boarding student 10 Nov. 2013 6 Dec. 2013 26 25 May 2014 21 Jul. 2014 57 subsidy

Source: Thailand PETS, 2014.

4.2 Delays in information flow to schools

In addition to the budget transfers, delays in the information flow from the Policy and Planning Division to school administrations were measured. For schools to properly manage their FEP funding, they need to be informed of the specific budget envelope and guidelines for each subsidy category. Thus, detailed budget information is to be transmitted by the Policy and Planning Division to each ESAO, which sends it onward to schools. Table 4.3 presents the delays that the study found for each of the stages (school semesters). It also shows the overall duration of budget realization by schools, as measured by bank account use. Although the OBEC primary and secondary schools received their FEP subsidy allocations at the same time, the schools may not have been aware of the transfer and had to manually verify receipt. The starting dates used for this measurement was the date the Policy and Planning Division released the budget petition and the date that the information was received by the ESAOs.

As shown in Table 4.3, during the first stage (second semester of the 2013/14 school year), the longest delay in information transmission from the Policy and Planning Division to the ESAOs involved the poor student subsidy; it took about a month and a half on average for the budget allocation details to be transmitted to the ESAO authorities, followed by the first tranche of the general subsidy, which took about a month on average to be received. Such delays could be in part explained by the Policy and Planning Division staff having to work away from the office during the political unrest in Bangkok as well as modifications made to the electronic filing and web-based communication systems at OBEC. Information on the poor student subsidy category was released much faster during the second stage of FY 2014/15, but other delays were found, especially for the boarding student subsidy, at an average of 39 days.

The ESAO role as a subnational unit managing basic education includes responsibility for informing schools about their budget envelope for each subsidy category. This information transmission process took about a month on average in stage 1 for the 30 per cent adjustment and the poor student subsidy as well as for the two other subsidy components in the second stage.

26 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 4. Budget allocation, release and spending in the Free Education Programme

The overall information transmission process from the Policy and Planning Division to schools (the sum of the first two columns for each stage) was slightly shorter for some categories due to a school’s own awareness of the budget transfer before receiving the official information from the ESAO. Schools can verify receipt of the budget transferred via the electronic budget system by monitoring their banking transactions. On average, schools realized receipt of the transfer on their own before the ESAO transmitted the actual information to them (shown as a negative sign in the third column for each stage in Table 4.3).

Table 4.3: Delay in the information flow about the budget transfer from the Policy and Planning Division to ESAO and to schools (numbers of days)

Stage 1 (semester 2 of 2013/14 school Stage 2 (semester 1 of 2014/15 school year) year) Types of Policy and Policy and subsidy Planning ESAO to School Planning ESAO to School Division to school awareness Division to school awareness ESAO ESAO General 27 9.54 -0.95 31 27.25 2.28 subsidy 70% General 13 24.17 -5.86 11 11.71 0.52 subsidy 30% Poor student 43 23.17 -13.78 11 11.92 0.88 subsidy Boarding student 8 15.36 4.18 39 26.64 -1.40 subsidy

Source: Thailand PETS, 2014.

4.3 Budget allocation: Execution rate at the central level and disbursement to schools

4.3.1 Budget execution at the central level

Table 4.4 presents the percentage of the FEP budget that was allocated to the OBEC Treasury for school transfers in FY 2014/15, based on the Comptroller General’s Department GFMIS data (Ministry of Finance). For FY 2014/15, the budget execution rate of the FEP budget envelope at the central level was estimated at 94.6 per cent; thus, about 5.6 per cent of the planned FEP envelope was not allocated by the Policy and Planning Division.

The remaining unused funds at the Policy and Planning Division level amounted to 2,273 million baht (see the last column). The largest remaining budget was associated with the unused portion of the poor student subsidy (not shown). The allocation rule of this subsidy, which is capped by a 40 per cent and 30 per cent threshold for primary and secondary schools, respectively, of the total number of students enrolled, may be responsible for the discrepancies. Although the poverty incidence may be more severe in some geographical areas, schools located in those areas do not receive the poor student subsidy proportionally to their increase of poor students. As well, the discrepancies may be a result of smaller numbers of enrolled students due to a lower-than-expected birth rate and a higher- than-expected drop-out rate. As reported by the Policy and Planning Division, the remaining FEP budget for FY 2013/14 was in part allocated to selected schools to cover electricity bills.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 27 4. Budget allocation, release and spending in the Free Education Programme

Table 4.4: FEP central-level budget execution rate, FY 2013/14

Allocated budget from Policy and Remaining Planned budget Planning Division Allocated/ funds at the Policy (request) to the OBEC planned budget and Planning Subsidy category (a) Treasury for (b/a) Division school transfers (a)-(b) (b) Baht % Baht Basic learning activity subsidy + 25,276,194,400 24,010,643,455 95.0 1,265,550,945 top-ups Books 5,556,187,700 5,246,352,250 94.4 309,835,450 Uniforms 2,994,966,900 2,809,461,562 93.8 185,505,338 Learning materials 2,922,399,800 2,749,151,706 94.1 173,248,094 Student development 4,981,146,300 4,642,040,928 93.2 339,105,372 activities Total FEP OBEC 41,730,895,100 39,457,649,901 94.6 2,273,245,199

Source: Authors’ calculation from the Comptroller General’s Department GFMIS data, Ministry of Finance.

4.3.2 Disbursement to schools

Making use again of the Comptrollers General’s Department GFMIS data for the overall FEP budget, Figure 4.1 shows the rhythm of the FEP budget disbursement from the OBEC Treasury to primary and secondary schools in FY 2014/15.

Actual budget disbursement to schools was consistent with the timeline of the budget management process described in Table 4.1. About 25 per cent of the overall FEP budget was released during the first quarter of the fiscal year (stage 1), corresponding to the second semester of the 2013/14 school year; about half of the budget was released at the beginning of the second quarter (stage 2), which corresponds to the period preceding the beginning of school year 2014/15. The last 25 per cent of the budget was released during the last quarter of the fiscal year, corresponding to the beginning of the first semester of the 2014/15 school year. The small discrepancies between the amount allocated to schools in Figure 4.1 and the total actual FEP spending in Table 4.4 are due to budget adjustments made during the fiscal year.

28 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 4. Budget allocation, release and spending in the Free Education Programme

Figure 4.1: Rhythm of actual FEP disbursement to schools, FY 2013/14

40,000 100% 90% 35,000 80% 30,000

70% 25,000 60% 20,000 50% 40% 15,000 Million baht Million 30% 10,000 20% 5,000 10% 0 0% Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

Source: Comptrollers’ General Department, GFMISata, Ministry of Finance. Source: Comptrollers’ General Department, GFMIS data, Ministry of Finance.

4.4 School receipt of their FEP resources

Many data discrepancies emerged in the comparison of the school reports (based on school records for receiving their budget transfers for the various FEP subsidies during FY 2014/15), with the Policy and Planning Division allocations. These discrepancies between resource allocation and destination were sometimes positive, with schools reporting receiving more FEP funding than the electronic allocation figures reported by the OBEC Treasury. Figure 4.2 summarizes the percentage of school reporting mismatches (positive and negative). More frequent mismatches surfaced in stage 2 (first semester of the 2014/15 school year), the period during which schools receive the general subsidy’s 30 per cent tranche as well as the poor student and boarding student subsidies. Overall, about 47 per cent of the schools reported mismatched resources in the first stage, while some 58 per cent of the school sample reported mismatched resources in the second stage. The PETS data likely were affected by errors and poor-quality school bookkeeping. For example, data entries from the surveys were reported at the wrong stage; for several schools, funds from other programmes were reported.

If we trust the electronic budget transfer data records from the OBEC Treasury as accurate and corresponding to the fund transfers to school accounts and accept that the discrepancies in the receipt records at the school level were due to human error—most probably due to accounting record problems—then the potential leakage of resources from the Policy and Planning Division budget to schools cannot be estimated.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 29 4. Budget allocation, release and spending in the Free Education Programme

Figure 4.2: Differences between the Policy and Planning Division budget allocation and school receipts

Stage 1 (Semester 2/2013-2014) Stage 2 (Semester 1/2104-2015) 55.4 40.8

22.9 23.7 20 19.6 16.3 13.8 16.3 16.3

General subsidy Books Uniforms Learning Student + poor and materials development boarding activities

Source: Thailand PETS, 2014. Source: Thailand PETS, 2014.

In line with the previous hypothesis, the electronic allocation data records from the OBEC Treasury were used in the following analysis to estimate FEP subsidies available at the school level. Table 4.5 presents the FEP resources per student that were allocated to schools for each category, based on the OBEC Treasury electronic data. The total basic FEP subsidy consists of five categories: general subsidy, books, uniforms, learning materials and student development activities. OBEC schools received a total basic learning activity subsidy amounting to an average of 4,608 baht per student during the fiscal year covering the two semesters. About 56 per cent of the total basic learning activity subsidy covered each school’s operations, and about 15 per cent was allocated for books. Student development activities consumed about 13 per cent of the FEP transfer, while uniforms and learning materials absorbed some 11 per cent of the funds.

FEP per-student resources are also presented by school size, type and location. Total basic subsidies tend to vary with school size and location due to differences in student composition and grade levels.

The total basic learning activity subsidy per student was about 50 per cent greater in secondary schools, compared with primary schools, given the increased per-student subsidy rate with grade level for most categories of subsidies.

For the so-called ‘top-up’ subsidies, OBEC schools received in FY 2014/15 a poor student subsidy amounting on average to 1,501 baht per student, while transfers to schools with boarding students averaged at 4,896 baht per student per year (average per-student subsidy increases with grade level and school size).

30 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 4. Budget allocation, release and spending in the Free Education Programme

Table 4.5: Allocated per-student subsidy by categories of subsidies and school size, types and location, FY 2013/14

All Size Type Location schools % (baht) Small Medium Large Primary Secondary Boarding Rural Urban (baht) (baht) (baht) (baht) (baht) (baht) (baht) (baht) General 2,597 56 2,200 2,471 2,615 2,262 3,869 3,098 2,540 2,967 subsidy Books 670 15 643 667 763 583 1,001 775 645 832 Uniform 375 8 369 378 387 355 450 397 370 407

Learning 374 8 365 376 399 349 471 404 367 421 materials

Student development 593 13 562 604 658 502 937 701 572 730 activities Total basic 4,608 100 4,138 4,496 4,821 4,051 6,728 5,373 4,493 5,356 subsidy Poor student 1,501 1,366 1,538 1,825 1,115 2,971 2,043 1,413 2,074 subsidy Boarding student 4,896 4,692 4,979 5,346 4,179 4,860 4,860 subsidy

Source: Policy and Planning Division’s allocation data.

Adjustments to the basic learning activity subsidy As mentioned earlier, each semester, a readjustment of the general subsidy is done through the allocation of a second tranche, at 30 per cent, based on the actual number of students attending schools. Hence, based on current semester information provided by schools (and verified by ESAO), the Policy and Planning Division readjusts—upward or downward—the FEP general subsidy allocation. Figure 4.3 shows the percentage of schools that experienced an upward adjustment in FY 2013/14, implying increases in actual students enrolled in school, compared with the projections (based on the previous semester attendance). Regardless of school size, about 40 per cent of schools in the sample had an increase in their student enrolment and, conversely, about 60 per cent experienced a decline. Such adjustment is consistent with an overall decline in the numbers of students enrolled in the public education system due to a lower birth rate in the population.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 31 4. Budget allocation, release and spending in the Free Education Programme

Figure 4.3: Percentage of schools experiencing an upward subsidy adjustment, FY 2013/14

Primary Secondary 71.4

42.9 36.8 32.1 23.5

7.1

Small medium Large

Source: Thailand PETS, 2014. Source: Thailand PETS, 2014.

4.5 School management of FEP subsidies

To understand schools’ use of the FEP resources, the discussion now looks at school spending of each subsidy category and then examines the unspent FEP funds at the school level.

4.5.1 Schools’ overall use of FEP subsidies

Table 4.6 (a, b and c) presents school use of FEP funds by subsidy category for each semester and for FY 2013/14 for the overall sample and for primary and secondary schools. Overall at the school level, about 55 per cent of total FEP subsidies were reported as spent for basic learning activities, followed by books (14.9 per cent), student development activities (10.1 per cent), uniforms (7.1 per cent), learning materials (6.5 per cent), poor students (5.9 per cent) and boarding students (0.5 per cent). Spending across school levels by subsidy categories shows relatively little variation.

Table 4.6: School spending by subsidy categories (amounts and shares), FY 2013/14 a. All schools (n=240) Semester 2 of 2013/14 Semester 1 of 2014/15 FY 2013/14 Type of subsidy school year school year Amount % Amount % Amount % General subsidy (learning 166,456,667 64.3 183,597,240 48.6 350,053,906 55.0 activities) Books 11,965,268 4.6 82,728,345 21.9 94,693,613 14.9 Uniforms 701,287 0.3 44,446,320 11.8 45,147,607 7.1 Learning 20,623,162 8.0 20,843,800 5.5 41,466,962 6.5 materials Student development 40,246,400 15.6 24,257,298 6.4 64,503,698 10.1 activities Poor students 17,073,035 6.6 20,314,934 5.4 37,387,969 5.9 Boarding 1,668,330 0.6 1,351,970 0.4 3,020,300 0.5 students Total 258,734,148.0 100 377,539,907 100 636,274,055 100

32 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 4. Budget allocation, release and spending in the Free Education Programme b. Primary schools (n=190) Semester 2 of 2013/14 Semester 1 of 2014/15 FY 2014 Type of subsidy school year school year Amount % Amount % Amount % General subsidy 63,198,335 64.6 61,832,763 43.5 125,031,097 52.1 (learning activities) Books 941,104 1.0 33,323,891 23.4 34,264,995 14.3 Uniforms 251,187 0.3 19,435,335 13.7 19,686,522 8.2 Learning materials 9,322,413 9.5 9,565,427 6.7 18,887,840 7.9 Student development 15,796,441 16.2 7,370,199 5.2 23,166,640 9.7 activities Poor students 7,027,017 7.2 9,734,507 6.8 16,761,524 7.0 Boarding students 1,227,930 1.3 867,970 0.6 2,095,900 0.9 Total 97,764,427 100 142,130,091 100 239,894,518 100 c. Secondary schools (n=50) Semester 2 of 2013/14 Semester 1 of 2014/15 FY 2013/14 Type of subsidy school year school year Amount % Amount % Amount % General subsidy 103,258,332 64.1 121,764,477 51.7 225,022,809 56.8 (learning activities) Books 11,024,164 6.8 49,404,454 21.0 60,428,618 15.2 Uniforms 450,100 0.3 25,010,985 10.6 25,461,085 6.4 Learning materials 11,300,749 7.0 11,278,373 4.8 22,579,122 5.7 Student development 24,449,959 15.2 16,887,100 7.2 41,337,058 10.4 activities Poor students 10,046,018 6.2 10,580,427 4.5 20,626,445 5.2 Boarding students 440,400 0.3 484,000 0.2 924,400 0.2 Total 160,969,721 100 235,409,816 100 396,379,537 100

Source: Thailand PETS, 2014.

Schools have a certain degree of latitude regarding use of the FEP subsidies, given the relatively undetailed programme guidelines. Several have chosen to exercise this autonomy. This can be seen in Table 4.7, which presents the percentage of FEP resources spent in proportion of the received transfer for each subsidy category. During FY 2013/14, schools reported overspending on certain subsidy categories—in particular, basic learning activities, books and poor students—while underspending in other categories—in particular uniforms, student development activities and boarding students. This reallocation across categories at the school level could be explained by a tendency by schools to spend on books and learning activities as well as poor students and boarding students’ meals, especially at the beginning of the first semester, at the expense of other subsidy funding. They then tend to use the 30 per cent general subsidy adjustment for the other required activities; the underspent categories, such as student development activities, tend to be managed towards the end of the school year.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 33 4. Budget allocation, release and spending in the Free Education Programme

Table 4.7: FEP subsidy spending, receipt and use rate, by subsidy category, FY 2013/14

Spending Received Use rate (%) (million baht) (million baht) General subsidy 350.1 318.6 109.9 (learning activities) Books 94.7 88.1 107.5 Uniforms 41.5 44.0 94.3 Learning materials 45.2 45.1 100.2 Student development 64.5 78.4 82.3 activities Poor students 37.4 34.3 109.0 Boarding students 3.0 3.2 93.8 Total 636.3 611.7 104.5

Source: Thailand PETS, 2014.

Overall, the surveyed schools reported spending 4.5 per cent more on average than the total FEP subsidies they received in FY 2013/14. According to the guidelines, the general subsidy budget component can be spent by schools over two fiscal years. Hence, the overspending of the total FEP budget could be explained by schools’ use of their accumulated FEP budget. As shown in Table 4.8, which highlights the unspent FEP budget at the school level in FY 2013/14 and FY 2014/15, important programme funds remain year after year in school coffers. Despite overspending their FEP budget in FY 2013/14, schools’ unused funds at the end of the year still represented more than 20 per cent of their FEP subsidy. In principle, these unused funds should be transferred back to the OBEC Treasury. It is unclear why schools retain these funds over time.

At the school level, unused FEP funds represented more than 20 per cent of subsidies at the end of the past two fiscal years, amounting to about 8.6 billion baht at the national level ($240.6 million)—and this despite overspending the FEP budget in FY 2013/14.

Table 4.8: Percentage of remaining FEP funds at the school level, FY 2013/14 and FY 2014/15

% of Fiscal Amount brought Balance carried Amount received Amount spent remaining year forward forward funds 2013 164,815,653 527,665,239 517,629,566 174,391,325 25.2 2014 174,391,325 577,066,033 595,865,784 155,620,613 20.7

Note: Remaining funds= (balance carried forward / (amount brought forward + received)) x100.

Source: Thailand PETS, 2014.

In the following sections, the discussion further examines use of each FEP subsidy category at the school level to better understand school management of the FEP subsidies. By comparing the programme’s guidelines with school practices, the analysis examines efficiency in budget spending, in particular spending modalities, potential delays in transferring subsidies (cash or in-kind) to students’ households and amount of per-student spending.

34 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 4. Budget allocation, release and spending in the Free Education Programme

4.5.2 General subsidy for learning and teaching activities

The general FEP subsidy for learning and teaching activities represents the largest share of FEP resources for day-to-day operations. Schools receive this subsidy based on the number of enrolled students, with the capitation grant varying with grade levels (see the allocation rule in Table 3.5 for more details). Such a per-student general subsidy aims at supporting the horizontal equity of resource allocation to schools. To enhance flexibility in school spending, the Policy and Planning Division only sets broad guidelines on spending categories. Still, public schools must present annual operation plans, approved by their school board, that describe how the FEP budget will be used.

Figure 4.4 shows an overuse rate of the basic learning activity subsidy as a percentage of resources received, classified by school size and location. Overall in the school sample, regardless of size and location, schools tended to overspend the FEP general subsidy, compared with the actual subsidy allocation. Extra spending in FY 2013/14 could come from various sources, including retained funds, reallocation from other subsidy categories (in particular learning materials) and other resources (public and non-public contributions).

Figure 4.4: General subsidy overuse rate, by school type and location, FY 2013/14

25 21 20 20 1414 15 11 11 10 8 8 6 6 6 5 5 4 4 4 4 5 5 4 5 5

0

-5 Rural -10 -7 Urban -11 -15 Total -20 -19 -25 Small Medium Large Total Small Medium Large Total Primary Secondary

Note: Use rate = (spending/reception) x100). Note: Use rate = (spending/reception)Source: Thailand x100). PETS, 2014.

Source: Thailand PETS, 2014.

In terms of the specific expenditure of these funds by category of school activities (see Table 4.9), about 40 per cent of the general subsidy was used to support facility management (utilities, transportation, operations), followed by learning and teaching activities (teaching materials, library books, tests), personnel management (hiring temporary teachers and non-teaching staff, compensation) and capital expenditures. Such a pattern of expenditure diverges from the guidelines, which indicate that schools should spend about 60 per cent of the general subsidy on learning and teaching activities and the remaining funds for other supporting activities.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 35 4. Budget allocation, release and spending in the Free Education Programme

Table 4.9: General subsidy use, by category of school activities, amount and share, FY 2013/14

School activity Amount Share (%) Learning and teaching 94,770,088 27.1% Personnel management 65,920,375 18.8% Capital expenses 44,876,200 12.8% General management 144,487,245 41.3% Total 350,053,908 100%

Source: Thailand PETS, 2014.

4.5.3 Books

To guarantee free basic education, the Government allocates a specific budget within the FEP funding for books for all students. This book subsidy is allocated on a per-student basis and varies with grade levels, from 200 baht to 1,100 baht per student per year. According to the national basic curriculum (2008), the book subsidy is expected to cover the costs of eight basic core subject books and three exercise books per school year.

Schools have the flexibility in selecting subject and exercise books out of a book list approved by the OBEC. Schools are required to provide every enrolled student with the basic book requirement (eight core and three exercise books), and books remain the property of the students. Schools are required to allocate unspent book subsidies on other book purchases or teaching materials.

Book procurement must follow the public procurement regulation to ensure transparency and cost savings. The procurement of books must be planned and realized before the beginning of the school year. Schools should receive the per-student book subsidy before the end of the second semester of the preceding year. The PETS found that most schools had received the book subsidy on time and had enough time to prepare for their book procurement activities.

Figure 4.5 presents the overuse rate of the book subsidy as a percentage of the resources received, classified by school size and location. Analysis of the PETS findings indicated reallocations of the subsidies across categories. Overall, schools, especially urban ones, tended to spend slightly more on average than their allocated book budget (at 3.5 per cent) in FY 2013/14. Urban schools invested about 17 per cent more on books than their allocated budget. However, small urban secondary schools as well as large rural secondary schools underspent their budget by about 10 per cent and 20 per cent, respectively.

36 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand

4. Budget allocation, release and spending in the Free Education Programme

Figure 4.5: Book subsidy overuse rate, by school type and location, FY 2013/14

30 26 25

19 20 18 15 11 9 Rural 10 4 4 3 3 2 2 2 Urban 1 0 0 Total -1 -1 -3 -3 -4 -3 -10 -8

-20 -20 Small Medium Large Total Small Medium Large Total -30 Primary Secondary

Source: Thailand PETS, 2014. Source: Thailand PETS, 2014.

As shown in Table 4.10, urban schools spent about 50 per cent more on books per student than rural schools in FY 2013/14, at 963 baht compared with 651 baht. Secondary schools’ total book expenditure per student was more than two-thirds larger than that of primary schools, at 1,035 baht, compared with 603 baht.

Table 4.10: Book expenditure per student, FY 2013/14

Rural Urban Average Types of books (baht) (baht) (baht) Primary 212.0 243.2 214.2 Kindergarten Secondary Average 212.0 243.2 214.2 Primary 560.1 612.9 563.9 Basic subjects Secondary 909.1 1,167.3 1,002.0 Average 613.7 924.7 655.2 Primary 154.1 176.0 155.7 Exercise books Secondary 0.0 0.0 basic subject Average 150.6 176.0 152.5 Primary 2.0 7.7 2.4 Other books Secondary 0.7 0.0 0.4 Average 1.8 3.4 2.0 Primary 595.6 701.2 603.4 Total books Secondary 961.6 1,167.3 1,035.6 Average 651.9 963.4 693.4

Source: Thailand PETS, 2014.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 37 4. Budget allocation, release and spending in the Free Education Programme

Urban schools’ higher spending on books per student was also noticeable in the number of books purchased (see Figure 4.6), with secondary urban schools buying 14 books, compared with the 11.5 books that rural schools bought per student.

Figure 4.6: Number of books purchased per student, by type of school, location and size, FY 2013/14

a. Primary Level 3 1.Science 2.5

2 2.Mathematics & exercises

1.5 3.Social science, religion and culture study 1 4.English language & exercises 0.5 5.Health and physical

0 education Small medium Large Rural Urban

b. Secondary Level 3.5 1.Science 3 2.Mathematics 2.5

2 3.Social science religion and culture study 1.5 4.English language 1

0.5 5.Health and physical education 0 Small medium Large Rural Urban 6.Thai language

Source: Thailand PETS,. 2014 Source: Thailand PETS, 2014.

Timely availability of school books and manuals is an important component of the school learning environment. However, schools’ annual book purchase process is potentially affected by procurement and delivery delays of publishers and book distributors. Certain book subjects are currently monopolized by book publishing companies at the central level, which affects delays and costs. After inquiring about delays in book deliveries, the survey found that one quarter of schools in the sample received their books late in the 2013/14 school year (see Table 4.11). Delays were measured in terms of delivery days after the beginning of each of school semester. Book delays especially affected the secondary schools, with almost half of them reporting delays in book delivery, in particular large urban schools (three-quarters of them received their books late).

38 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand

4. Budget allocation, release and spending in the Free Education Programme

On average, primary school books were nearly 23 days late and secondary school books were nearly 26 days late. The longest delays were found in medium-sized schools, at 106 days in rural areas (42 days in urban areas). School officials attributed the delays to late delivery by the distributors (at 41 per cent) and hurdles in the procurement purchase (at 30 per cent).

Table 4.11: Book delivery a. Duration of delays in FY 2013/14 (number of days) School category % of schools experiencing delays Average number of days of delay Rural urban Total Urban Rural Total Primary Small 18.4 25.0 18.7 31.5 31.5 Medium 19.7 19.2 17.4 17.4 Large 30.8 19.0 6.0 6.0 All 19.9 7.1 18.9 22.8 22.8 Secondary Small 33.3 31.6 27.6 27.6 Medium 50.0 40.0 47.1 42.5 106.0 55.2 large 50.0 75.0 71.4 7.7 7.7 All 40.6 61.1 48.0 33.0 17.5 25.6 Total 23.1 37.5 25.0 26.2 17.5 24.2 b. Reason for delays Reason No. of schools % 1. Budget delay 0 0.0 2. Delivery delay by vendor or 41 68.3 distributor 3. School procurement procedure 18 30.0 4. Other 1 1.7 Total 60 100

Source: Thailand PETS, 2014.

4.5.4 Learning materials

To enhance the quality of students’ learning and ease parents’ education burden, the Government subsidizes the household purchase of learning materials through the FEP cash transfer. The financial support for learning materials ranges from 200 baht to 460 baht per student per year. The subsidy use for learning materials is flexible, and parents can use the funds for student uniforms if need be.

Despite such flexibility, school use of this subsidy category was slightly lower than what was allocated, regardless of the type of school or location (see Figure 4.7a). On average, schools spent about 3 per cent less than what was allocated, with medium-sized primary and small secondary schools in urban areas spending much less than their budget allocation.

Although the FEP guidelines indicate that parents are to receive this subsidy transfer in cash, some schools choose not to follow the specification (see Figure 4.7a). Almost one quarter of the surveyed schools chose instead to allocate the material in-kind instead of as cash. Rural schools were more inclined to use the in-kind approach, as were the small urban schools.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 39 4. Budget allocation, release and spending in the Free Education Programme

Even though larger schools have advantage in purchasing learning materials at a lower price—receiving a greater discount for a large order—and thus might be inclined to use the in-kind approach, it was actually the smaller primary and secondary schools taking advantage of this option more frequently. Even if the subsidy was transferred in cash to parents, as specified in the FEP guidelines, most schools tended to require parents to buy packages of learning materials through the school cooperative or selected vendors.

Students’ access to learning materials is potentially affected by cash transfer delays to parents. On average, as shown in Figure 4.7c., parents received the cash transfer for learning materials 37 days after the beginning of the second semester of the 2013/14 school year. Delays were shorter on average for the first semester of the 2014/15 school year (at 17 days), but were as high as 42 days for large urban schools.

Figure 4.7: Learning materials a. Learning material underuse rate, by school type and location, FY 2013/14

5 3 1 1

0 -1 -1 -1 -2 -5 -3 -4 -5 Rural -6 -6 -7 -7 -7 -7 -7 -10 -8 -9 Urban -11 -11 -15 Total

-20 -19

-25 -24 -25 Small Medium Large Total Small Medium Large Total -30

Primary Secondary b. Cash transfer to households (% of schools)

Rural Urban Total 100 100 92 88 91 86 89 88 84 83 80 82 82 75 75 76 75 79 69 71 72 61 62

0

Small Medium Large Total Small Medium Large Total

Primary Secondary

40 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 4. Budget allocation, release and spending in the Free Education Programme c. Delays (number of days)

54 55 Rural Urban Total 52 50 49 44 43 43 41 42 41 41 36 36 35 36 36 35 37 33 34 35

24

13

Small Medium Large Total Small Medium Large Total Primary Secondary

Second semester of the 2013/14 school year

First semester of the 2014/15 school year

42 42 Rural Urban Total 33

25 22 21 20 20 19 17 18 14 1414 15 14 13 11 12 12 9 10 9

Small Medium Large Total Small Medium Large Total Primary Secondary

Source: Thailand PETS, 2014. Source: Thailand PETS, 2014.

Household receipt of the learning materials subsidy Data from the household survey module of the PETS allowed for triangulating data collected at the school level. About 73 per cent of households reported receiving FEP funds from their school for learning materials in each of the two semesters covered by the PETS, which was consistent with school-reported data. The amount transferred was also consistent with the school data that reflected lower spending than what was received in the budget allocation, indicating that the cash transfer was 30 per cent smaller than what is specified in the guidelines (see Figure 4.8a).

Primary school students received on average an annual grant of about 373.4 baht for learning materials, compared with the prescribed 390 baht per-student subsidy. Secondary school students, however, received the prescribed per-student subsidy of 441 baht. The subsidy for learning materials was less than what households required; about 60 per cent of households reported spending extra funds for learning materials in the 2013/14 school year, while close to 80 per cent of households with children in rural secondary schools spent extra funds (see Figure 7b). The household data on delays in receiving the learning materials was broadly consistent with what schools reported, with about a one-month delay reported on the transfer of the cash or in-kind subsidy after the beginning of each semester, with longer delays experienced by households with primary school children (see Figure 7c).

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 41 4. Budget allocation, release and spending in the Free Education Programme

Figure 4.8: Household receipt of learning materials, FY 2013/14 a. Average amount of financial transfer received, by households (baht per student)

500 445 441 440 438

450 381 378 373 400 368 350

300

223 223 221 221 220 220 220 250 219 192 191 189 188 187 186 184 200 184 150 100 50 0 Small Medium Large Total Small Medium Large Total Primary Secondary Semester 2/2013 (All) Semester 1/2014 (All) Total FY2014

b. Percentage of households spending extra money for learning materials

Rural Urban All

80 78 78 79 77 74 73 73 71 72 68 65 68 61 56 53 53 53 52 51 50 51 49 50

Small Medium Large Total Small Medium Large Total Primary Secondary

c. Cash transfer delays (number of days)

47 44 44 38 36 34 32 31 30 28 26 23 24 20 20 16 15 14 12 11 12 11 12 9

Small Medium Large Total Small Medium Large Total Primary Secondary Semester 2/2013 Semester 1/2014 Average 2013-2014

Note: Delays at the beginning of each semester were compared. .Sample size: 2,267 households. Note: Delays at theSource: beginning Thailand of each semesterPETS, 2014. were compared. Sample size: 2,267 households.

Source: Thailand PETS, 2014.

42 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 4. Budget allocation, release and spending in the Free Education Programme

4.5.5 Student uniforms

Unlike the book and learning materials subsidies, which are transferred to schools each semester, the FEP uniform budget is allocated to schools once a year. The subsidy rate increases with grade level, ranging from 300 baht to 500 baht per student per year. Given the cost of uniforms, the subsidy only covers a fraction of the total cost for two uniforms per student prescribed in the FEP guidelines. Thus, schools tended to fully spend what they were allocated, with only a tiny 1 per cent of the budget unused, possibly due to a decline in student enrolment (see Table 4.12).

The uniform subsidy is intended to be provided in cash to parents, who are allowed to spend the cash transfer on uniforms or on learning materials. Delays in the subsidy transfer to households was reported in about one third of the school sample (see Table 4.12b), with the subsidy received, on average, 23 days after the beginning of the semester.

With the approval of parents and the school board, each school can choose to provide uniforms in- kind to students rather than the cash subsidy. Most schools in the sample (about 95 per cent) transferred the funds, as prescribed in the guidelines. Only a handful of schools, mostly small and remote schools, provided the actual uniform to students (see Table 4.12c). With the inflating price of student uniforms, most schools have no incentive to opt for the in-kind disbursement.

Table 4.12: Student uniform subsidy a. Student uniform subsidy use rate, by school type and location, FY 2013/14 (%) Rural Urban Total Primary Small 98.9 108.0 99.3 school Medium 99.3 75.8 98.7 Large 104.6 98.9 102.4 Total 99.5 98.2 99.4 Secondary Small 87.4 75.7 86.8 school Medium 93.5 112.1 99.0 Large 79.6 100.6 97.6 Total 89.2 102.4 94.0 Total 97.9 100.6 98.3

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 43 4. Budget allocation, release and spending in the Free Education Programme

b. Delays in subsidy transfers (both cash and in-kind) (number of days) Rural Urban Total Primary Small 6.3 20.0 7.8 school Medium 14.8 14.0 14.8 Large 13.3 14.0 13.6 Total 11.1 15.7 11.8 Secondary Small 26.8 9.0 25.5 school Medium 42.5 56.0 48.6 Large 44.3 44.3 Total 32.1 45.9 38.3 Total N= 17.8 36.3 23.0 c. Cash transfer to households (% of schools) Rural Urban Total Primary Small 93.1 100.0 93.4 school Medium 93.4 100.0 93.6 Large 100.0 100.0 100.0 Total 93.8 100.0 94.2 Secondary Small 100.0 100.0 100.0 school Medium 100.0 100.0 100.0 Large 100.0 91.7 92.9 Total 100.0 94.4 98.0 Total 94.7 96.9 95.0

Source: Thailand PETS, 2014.

Household receipt of the uniform subsidy The PETS household module inquired about parents’ perspective on the uniform subsidy transfer and potential bottlenecks. About 98 per cent of households reported receiving the cash transfer from their school for uniforms during the 2013/14 school year, which was consistent with the school-reported data (see Table 4.13a). However, more than 90 per cent of the households reported having to spend more on uniforms than what they received (see Table 4.13b). The subsidy for uniforms clearly was not sufficient to purchase the two prescribed uniforms.

44 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 4. Budget allocation, release and spending in the Free Education Programme

Table 4.13: Household receipt of the uniform subsidy a. Cash transfer to households (% of households) Rural Urban All Primary Small 96.8 100.0 96.9 school Medium 97.3 100.0 97.3 Large 99.2 100.0 99.5 Total 97.2 100.0 97.3 Secondary Small 99.3 100.0 99.4 school Medium 100.0 100.0 100.0 Large 100.0 96.5 97.1 Total 99.6 97.7 99.0 All 97.5 98.8 97.6 b. Extra spending by parents for uniforms (% of households) Rural Urban All Primary Small 91.1 92.3 91.1 school Medium 87.0 90.0 87.1 Large 95.3 94.6 95.0 Total 89.6 93.2 89.9 Secondary Small 92.3 90.0 92.2 school Medium 90.5 100.0 93.3 Large 90.0 99.2 97.8 Total 91.5 98.9 94.2 All 89.9 96.4 90.8

Note: Sample size: 2,267 households.

Source: Thailand PETS, 2014.

4.5.6 Student development activities

According to the FEP guidelines, schools are required to make use of the subsidy for student development activities by providing four categories of activities to all students: (i) at least one academic- related activity: (ii) boy and girl scouts programmes once a year, (iii) field trip once a year and (iv) at least 40 hours per student per year of enhanced services and learning activities using information and communication technology. The rate of subsidy increases with grade level, ranging from 430 baht to 950 baht per student per year.

As shown in Figure 4.9a, school spending on this subsidy category was lower than the amount transferred, by about 5 per cent overall. This was especially the case for urban schools, which underspent about 10 per cent on average of their subsidy. The large primary schools in urban areas and medium-size secondary schools in rural areas in the sample spent only about two-thirds of their subsidy allocation on these activities.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 45 4. Budget allocation, release and spending in the Free Education Programme

This underspending was reflected in the relatively low coverage of activities—about 19.6 per cent of the surveyed schools did not provide all four required activities during the academic year (see Figure 4.9b). Schools tended to request additional funding from parents for these activities, especially urban schools (at 15.6 per cent), while 20 per cent of the medium-sized and 25 per cent of the large secondary schools in urban areas requested additional contribution (see Figure 4.9c). In the medium-sized and large secondary schools in urban areas, parents’ reported contributing up to 1,500 baht per year for these activities (see Figure 4.9d).

Figure 4.9: Student development activities a. Student development use rate, by school type and location, FY 2013/14

80 56 60 Rural Urban 40 Total 20 2 4 1 1 0 0 -4 0 -9 -20 -13 -12 -9 -13 -20 -17 -18 -19 -21 -25 -25 -40 -32 -31 -33 -39 -60 Small Medium Large Total Small Medium Large Total Primary Secondary

b. At least one activity is not provided (% of schools)

24 25 24 25 21 21 21 20 19 20 17 18 17 17 14 14 14 13 Rural 11 11 8 Urban Total 0 0 0

Small Medium Large Total Small Medium Large Total Primary Secondary

c. Schools requesting additional funds for student development activities from parents (% of schools)

25 21 22 20 17 18 14 13 Rural 9 Urban 7 6 7 5 6 5 Total 3 4 1 1 0 0 0 0 0

Small Medium Large Total Small Medium Large Total Primary Secondary

46 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 4. Budget allocation, release and spending in the Free Education Programme d. Per-student additional fund for student learning activities from parents (baht per year)

Primary Secondary

1,567

615 633 250 300 100

Small Medium Large

Source: Thailand PETS, 2014. Source: Thailand PETS, 2014.

4.6 School management of the FEP top-up subsidies

In addition to the basic subsidies provided on a per-student basis, as previously explained, the FEP includes two ‘top-up’ subsidies to account for equity considerations: a poor student subsidy and a boarding student subsidy.

4.6.1 Poor student subsidy

The FEP supports poor students enrolled in compulsory education, from the primary to lower secondary levels. The poor student subsidy provides a direct cash transfer to needy students to help reduce the financial strain associated with education on their families and encourage continued enrolment in school. The annual subsidy is 1,000 baht for primary school students and 3,000 baht for lower secondary students. Following the parameter used by the Ministry of Interior, poor student status is defined as parent or guardian income that is less than 40,000 baht per year. No adjustment is made for family size.

Under the FEP guidelines, school authorities have responsibility for verifying households’ income status and reporting the number of enrolled poor students in their school. Reporting is done using the electronic data management centre, which includes income status in the individual records of students. Each schools’ verification of household income status, as well as ESAO supervision, tends to be weak and often subject to teachers’ discretion (teachers decide who will receive the subsidy).

As shown in Figure 4.10a, schools reported spending more on the poor student subsidy than what they were allocated from the OBEC Treasury in FY 2013/14, by about 12 percent. Urban secondary schools, however, spent less than allocated, by about 5 per cent, while medium-sized rural secondary schools spent 9 per cent less than their budget allocation.

The FEP guidelines on school management of the poor student subsidy are flexible. Schools can choose to manage the subsidy directly or transfer it in cash to households. In the former case, schools can spend the allocation on general expenditures, books, uniforms, meals or transportation. If schools choose to directly transfer the subsidy funds to parents, receipts and authorization from at least three appointed persons are required.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 47 4. Budget allocation, release and spending in the Free Education Programme

As shown in Figure 4.10b, only about one quarter of the surveyed schools chose to allocate the subsidy funds to households (including 4 per cent of schools that directly manage bank accounts for poor families). Most schools chose to manage the subsidy. Around 44 per cent of schools providing in-kind services using the poor student subsidy offered uniforms, while 19 per cent of schools used it to provide meals, and 16 per cent used it for transportation services to all students, poor and non- poor. Important variations were noted between school location and subsidy use. Rural and primary schools mainly provided uniforms, while urban schools mainly provided meals. Primary schools preferred to spend the subsidy allocation on uniforms, either sport uniforms or the school uniform, while secondary schools used it to provide school lunches for lower-secondary students.

Figure 4.10: Poor student subsidy a. Poor student subsidy use rate, by school type and location, FY 2013/14

25 22 23 21 Rural 20 17 16 Urban 13 13 Total 15 12 9 9 10 8 5 5 2 3 0 1 0 0 0

-5 -1 -9 -5 -6 -5 -10 -8 Small Medium Large Total Small Medium Large Total -15

Primary Secondary b. Management modalities of the poor student subsidy, by school type

Cash Transfer to Student’s Household Opening Bank Account

In-kind transfers Payment for Transportation

69 63 59

44 45 36 24 24 19 21 14 17 17 12 10 13 5 2 3 2

Total Primary Secondary Rural Urban

48 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 4. Budget allocation, release and spending in the Free Education Programme c. Type of spending by schools providing poor student subsidy in-kind (%)

Books and learning materials Uniforms Lunch Transportation Other

15 8 14 9 14 18 14 27 17 17 8 14 19 47 55 59 48 44 19

7 2 2 6 6 6 Primary Secondary Rural Urban All

Source: Thailand PETS, 2014. Source: Thailand PETS, 2014.

Table 4.14: Poor student subsidy spending per actual student (baht) a. Second semester of the 2013/14 school year Rural Urban Total Primary Small 572 316 560 school Medium 533 303 527 Large 348 513 418 Total 540 427 532 Secondary Small 1,101 1,500 1,123 school Medium 1,301 1,247 1,285 Large 1,148 1,509 1,453 Total 1,179 1,431 1,267 Total 641 978 686 b. First semester of the 2014/15 school year Rural Urban Total Primary Small 781 456 767 school Medium 539 473 538 Large 628 458 564 Total 665 460 650 Secondary Small 1,464 1,500 1,466 school Medium 1,251 1,433 1,305 Large 1,757 1,292 1,358 Total 1,402 1,343 1,381 Total 779 956 803

Source: Thailand PETS, 2014.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 49 4. Budget allocation, release and spending in the Free Education Programme

Household receipt of the poor student subsidy As shown in Table 4.15a, the poor student subsidy transfer modalities vary substantially between primary and secondary school children. For households with primary school-aged children, only about 11 per cent reported receiving the poor student subsidy in cash from their school in FY 2013/14. However, two-thirds of households with secondary school-aged children reported receiving the cash subsidy (85 per cent in large secondary schools). Overall for both school levels, 15 per cent of households reported receiving the poor student cash transfer, which was below the 25 per cent of those reported by schools (see Table 4.15a). One possible explanation is that most of households were less informed about the poor student subsidy, which was managed entirely without household participation. During the field monitoring trips, we were informed that schools officials do not feel confident transferring cash to households.

Even more importantly, the yearly level of cash transfer reported by households was only about 13 per cent of the expected poor student subsidy transfer set by the guidelines for primary school students, at 133 baht rather than the required 1,000 baht. For lower secondary school students, the cash transfer received by households was larger, but still only about 55 per cent of what the FEP guidelines require, at 1,703 baht rather than the required 3,000 baht (see Table 4.15b).

Table 4.15: Household receipt of the poor student subsidy a. Cash transfers to households (% of households) Semester 2 of 2013/14 school Semester 1 of 2014/15 school Average year year 2013–2014 Rural Urban All Rural Urban All Primary Small 8.1 10.7 8.2 9.2 14.3 9.4 8.8 school Medium 10.1 10.0 10.6 0.0 10.5 10.2 Large 19.6 34.0 26.7 23.5 36.0 29.7 28.2 Total 9.5 24.1 10.6 10.5 26.5 11.7 11.1 Secondary Small 26.1 100.0 29.2 44.4 100.0 46.4 37.8 school Medium 60.0 100.0 76.5 59.1 100.0 75.0 75.7 Large 33.3 87.0 80.8 33.3 95.8 88.9 84.8 Total 41.3 92.1 64.3 50.0 97.4 70.3 67.3 All 10.9 45.5 14.4 12.4 49.2 16.1 15.3

50 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 4. Budget allocation, release and spending in the Free Education Programme b. Cash received by households (baht per student) Semester 2 of 2013/14 school Semester 1 of 2014/15 school year year Sum 2013/14 Rural Urban All Rural Urban All Primary Small 42.5 53.57 43.05 60.55 71.43 61.08 104.13 school Medium 55.05 0 54.42 63.36 0 62.64 117.06 Large 137.25 210 173.27 176.47 220 198.02 371.29 Total 52.59 144.58 59.51 67.48 156.63 74.12 133.63 Secondary Small 165.22 1500 220.83 437.04 1500 475 695.83 school Medium 576.5 1500 956.76 542.27 1500 914.72 1,871.48 Large 133.33 1,304.35 1,169.23 133.33 1437.5 1,292.59 2,461.82 Total 341.96 1,381.58 812.26 464.04 1,461.54 891.54 1,703.8 All 65.07 533.06 112.73 86.53 573.77 135.91 248.6

Note: According to the FEP guidelines, the poor student subsidy is 500 baht and 1,500 baht per semester for primary school and lower secondary school, respectively. Sample size: 1,880 households.

Source: Thailand PETS, 2014.

4.6.2 Boarding student subsidy

Schools are eligible to receive a per-student subsidy allocated once every semester to support meal provision to students who require boarding services (at the school or in the community, typically students who live far away or face difficulty in commuting to school).

In FY 2013/14, the boarding student subsidy was set at 5,300 baht per student per year. The subsidy level is based on the costs of providing breakfast and dinner to boarding students. Additional meal subsidies are provided to schools by the local government authorities for primary school students. Schools hence bear greater costs in providing such meal services to lower secondary school students. The food subsidy covers only students enrolled in primary and lower secondary public schools. Schools charging school fees to parents for boarding services are not eligible for the subsidy.

In the sample, only 12 rural schools provided meals for their boarding students. As shown in Table 4.16a, schools’ reported use of the boarding student subsidy was lower overall than amount allocated in FY 2013/14, by about 11 per cent on average. However, medium-sized primary schools spent significantly less than their allocated budget, at about 4,400 baht per year (seeTable 4.16b).

To allocate the boarding student subsidy, schools could provide the subsidy in-kind to each student or as a cash transfer to their household. About half of the schools in the sample chose to transfer the cash subsidy directly to parents.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 51 4. Budget allocation, release and spending in the Free Education Programme

Table 4.16: Boarding student subsidy a. Boarding student subsidy use rate, by school type and location, FY 2013/14 (%) Rural Primary Small 100.0 Medium 79.4 Large Total 82.9 Secondary Small 100.0 Medium 100.0 Large Total 100.0 Total 88.6 b. Actual subsidy per student (baht) Semester 2 of 2013/14 school year Semester 1 of 2014/15 school year Primary Small 2,760 2,650 Medium 2,431 2,011 Large Total 2,525 2,193 Secondary Small 2,707 3,781 Medium 4,496 4,269 Large Total 3,423 4,025 Total 2,899 3,039

Note: According to the FEP guidelines, the boarding student subsidy should be 2,650 baht per student per semester.

Source: Thailand PETS, 2014.

Household reception of the subsidy Within the sample, only 12 schools provided meals for their boarding students. For the others, instead of allocating the subsidy in-kind, a cash transfer was made by the school to parents to cover meals. Among the 17 randomly selected households with boarding school children, two had received a 5,300 baht boarding subsidy per student per year, which corresponded to the guidelines.

4.7 School management of other resources: Lunch and milk subsidy programmes from Local Administrative Offices

In addition to the FEP resources, primary and secondary schools receive financial transfers from other sources, in particular local governments. Schools receive additional funding from the LAOs to provide lunch and milk programmes. Although these programmes are not part of the FEP, delay of these subsidies affects the school FEP management, which is why the survey inquired about such transfers.

52 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 4. Budget allocation, release and spending in the Free Education Programme

Other support from Local Administrative Offices: Use and problems Both the lunch and milk programmes include all students in primary schools. These programmes in schools are managed by local government officials, who decide what funds to transfer. Information collected at the school level indicated important delays in delivery of the school lunch transfer from the LAOs. Overall, about two-thirds of the surveyed schools reported receiving the transfer after a delay of about two months after the beginning of each semester in the 2013/14 school year (see Figure 4.11a). Rural schools, more than the other schools, reported such a delay (see Figure 4.11b), and about one quarter of the schools in urban areas reported insufficient funding to finance the programme.

Figure 4.11: Problems with the lunch programme (non-FEP) a. Delay of budget transfer (numbers of days)

Small Medium Large Total

119

64 66 68 61 59 62 60 59 55 55 57 54 52 49 53 53 44 45 45 43 45 45

15

Rural urban all Rural urban all Semester 2/2013-2014 Semester 1/2014-2015 Primary b. Types of problems

Other problems Insufficient funding for program management

10 9 12 11 25 10 10 25

69 69 50

Total Rural Urban

Source: Thailand PETS, 2014.

Source: Thailand PETS, 2014.

For the school milk programme, the LAO transfers were more punctual, with only some 7 per cent of schools in rural areas reporting delay in receiving the funding for the milk programme (see Figure 4.12). Nine schools (3.7 per cent) in urban areas reported insufficient funding to cover the entire 200 school days for all eligible students.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 53 4. Budget allocation, release and spending in the Free Education Programme

Figure 4.12: Main problems with the milk programme

Not covering all eligible students Not received at the beginning of the semester Covers less than 200 school days

27 29

100 64 62

10 9 Total Rural Urban

Source: Thailand PETS, 2014. Source: Thailand PETS, 2014.

4.8 Resources available at the school level: Inequities and targeting

Overall resources at the school level (including wages and capital) Transfers from the OBEC Treasury were the most important source of funds for schools (in the form of wages, capital investments, operating funds and FEP subsidies), representing about 85 per cent of what went into a school’s overall resources (see Table 4.17). Among the OBEC transfers, teachers’ compensation accounted for the largest component, amounting to more than two-thirds of total resources for the primary and secondary schools in the sample.5 The FEP subsidies represented about 10 per cent of the resources overall, at about 18.7 per cent of the resources for secondary schools and 8.3 per cent of the resources for primary schools. Local government and other non-OBEC contributions accounted for about 12.5 per cent of the primary schools’ overall resources—surpassing the FEP subsidies—but were almost negligible (at less than 1 per cent) for secondary schools.

Public schools in Thailand are prohibited from charging households for school tuition, but various fees can be collected from parents for specific purposes or programme implementation (such as hiring foreign-language teachers and other development activities)—if the school board and parents approve. Private contributions to schools, in the form of parents’ fees and local community and business organization donations, accounted for 2 per cent of the surveyed schools’ budgets, four times more in relative share for secondary schools (at 65 per cent) than for primary schools (at 1.3 per cent). Compared with schools’ non-wage recurrent resources, parents’ fees and other private contributions accounted for a much larger share, especially among the secondary schools.

5 As previously mentioned, personnel wages and compensation are transferred directly to teachers and teachers’ affectation to schools is a prerogative of the central OBEC.

54 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 4. Budget allocation, release and spending in the Free Education Programme

Table 4.17: Sources of school resources per student (baht per student per year and %)

Private Public sector contributions

Local OBEC Non-OBEC Parents community Total (local (school and Budget government fees and business and other support) sector ministries) FEP Wages Operating Capital Other In-kind (donations)

4,520 39,718 998 1,249 16 175 6,760 213 489 54,138 Primary school (8.3%) (73.4%) (1.8%) (2.3%) (0.0%) (0.3%) (12.5%) (0.3%) (1.0%) (100%)

7,169 25,277 556 1,866 43 112 309 2,325 191 37,850 Secondary school (18.7%) (67.2%) (1.4%) (4.9%) (0.1%) (0.3%) (0.8%) (5.8%) (0.8%) (100%)

5,072 36,709 906 1,378 22 162 5,416 652 427 50,745 All (10.0%) (72.4%) (1.8%) (2.7%) (0.0%) (0.3%) (10.7%) (1.2%) (0.9%) (100%)

Source: Thailand PETS, 2014.

Inequality in resource distribution across schools As illustrated in Table 4.17, inequalities across schools in terms of overall resources available appear to be a result of the unequal distribution of teachers, associated with variations in teachers’ experience across schools and locations (remote compared with urban schools). Inequalities also appear linked to differences in the private resources that schools received (parents’ fees and local business and community donations) across school locations and communities.

School size In the primary and secondary schools, the total resources available per student declined significantly with increased school size (see Table 4.18). Among the sample, the total resources available in small primary schools amounted to 65,386 baht per student, compared with 33,256 baht per student for large primary schools (column 8); among secondary schools, it was 40,070 baht per student in small facilities and 34,359 baht in large schools. This discrepancy is associated with economies of scale in school operations, which allow for lower resource costs in larger schools than in smaller facilities. Public schools in rural areas, both primary and secondary, received more resources per student than those located in urban areas. This is because most of the small schools—which constituted more than half of the OBEC schools and have fewer than 120 students—were located in rural areas, benefiting from greater per-student resources.

More education resources per student in small and rural schools do not, however, translate to better learning outcome. As discussed in section 4.10, small and rural schools in the sample were associated with lower student performance.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 55 4. Budget allocation, release and spending in the Free Education Programme

Table 4.18: Total resources per student, by source, school level, size and location, including FEP contributions (baht per year)

OBEC Total Total with FEP, Additional Total, FEP Public Parents with FEP including FEP for except (current non- & local at 40- poor poor Categories FEP at 40- Other OBEC community 30% student students Wages Capital (6) 30%) OBEC (4) (5) (8) = (6) subsidy (10) = (1) (2) (7) (3) + (7) at 100% (7)-(6) (9)

Primary 39,718 1,249 1,189 6,760 701 49,618 4,520 504,138 55,575 1,437 Small 48,931 1,616 1,588 8,240 447 60,822 45,464 65,386 66,818 1,432 Medium 34,032 954 907 5,491 658 42,041 4,597 46,638 48,199 1,561 Large 20,912 757 511 5,062 1,970 29,212 4,044 33,256 34,252 996 Rural 40,364 1,270 1,232 6,873 535 50,274 4,549 54,824 56,311 1,488 Urban 31,595 989 653 5,343 2,795 41,376 4,147 45,523 46,318 795

Secondary 25,277 1,866 711 309 2,517 31,222 7,169 37, 851 40,538 2,147 Small 28,617 1,528 1,180 305 705 32,335 7,734 40,070 42,999 2,929 Medium 26,494 3,362 519 405 2,114 32,894 6,941 39,835 42,091 2,256 Large 21,197 509 310 198 5,465 27,680 6,679 34,359 35,312 953 Rural 27,709 2,090 807 301 751 31,657 7,292 38,950 41,645 2,695 Urban 22,455 1,469 542 324 5,657 30,447 6,950 37,397 38,569 1,172 Total (average primary 36,709 1,377 1,089 5,416 1,080 31,222 5,072 50,745 52,442 1,585 and secondary)

Source: Thailand PETS, 2014.

Regions and districts Important variations in resources per students across regions and districts emerged in the analysis. As shown in Figure 4.13, differences in total resources available per student between regions were significant, especially among the primary schools. In particular, primary schools located in the North had access to the largest total available resources per student (at 65,119 baht), which was 36 per cent more resources per student than schools in the South, which, at 47,963 baht per student, was the lowest level of resources. Secondary schools located in the South also were less endowed, with 16 per cent less available resources per student than schools in the North-East (at 33,210 baht, compared with 39,661 baht, respectively).

56 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 4. Budget allocation, release and spending in the Free Education Programme

Figure 4.13: Total resources per student, by source and region and by primary and secondary schools 80,000 60,000 40,000 Bahts per student 20,000 0 North Central Northeast South North Central Northeast South

Primary Secondary wage capital private&nonOBEC other rev FEP basic FEP poor Source: PETS

Source: Thailand PETS, 2014. Source: Thailand PETS, 2014.

Some differences in resources were due to differences in school size (see Figure 4.14a). Still, even among schools of the same size, primary schools in the South received far fewer resources per student when compared with schools in all the other regions, in particular primary schools in the North, at 28 per cent, 16 per cent and 14 per cent fewer resources per student for small, medium and large schools, respectively.

Interestingly, as presented in Figure 4.14b, total resources per student among secondary schools did not decrease in size across regions; available resources per student actually increased with school size in the North. But schools located in the South reported a lower level of resources per student, with small schools having received 17 per cent fewer resources than schools in the central region (at 33,372 baht per student among southern small schools, compared with 45,225 baht among small schools in the central region). Medium-sized southern schools reported receiving 10 per cent fewer resources than north-eastern schools (at 37,640 baht per student, compared with 41,725 baht, respectively) and large southern secondary schools reported 47 per cent fewer resources than secondary schools in the North (at 23,231 baht per student, compared with 44,004 baht, respectively).

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 57 4. Budget allocation, release and spending in the Free Education Programme

Figure 4.14: Total resources per student, by source, region and school size a. Primary schools 80,000 60,000 40,000 Bahts per student 20,000 0

Small Large Small Large Small Large Small Large Medium Medium Medium Medium North Central Northeast South wage capital private&nonOBEC other rev FEP basic FEP poor

b. Secondary schools 50,000 40,000 30,000 20,000 Bahts per student 10,000 0

Small Large Small Large Small Large Small Large Medium Medium Medium Medium North Central Northeast South wage capital private&nonOBEC other rev FEP basic FEP poor

Source: Thailand PETS, 2014.

Across districts, significant differences in the availability of resources per student were reported by both primary (see Figure 4.15a) and secondary schools (see Figure 4.15b). In particular, the largest difference among primary schools emerged between the southern and northern regions, with Phuket district (in the South) receiving the least, at 40,041 baht per student, while primary schools in Phayao 1 district received the most, at 73,103 baht—a 45 per cent difference. In the secondary sector, schools in Phang Nga, Phuket and Ranong districts received the least, at 33,210 baht on average per student, compared with the 40,918 baht (the most) that schools in Phetchaburi district received—a 19 per cent difference.

58 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 4. Budget allocation, release and spending in the Free Education Programme

Figure 4.15: Total resources per student, by source and district a. Primary schools 80,000 60,000 40,000 Bahts per student 20,000 0

Trang 2 Phuket Kalasin 2 PhayaoPhayao 1 2 Lopburi 1 RayongSa 1 Kaeo 2 Nong Khai 1 Chiang ChiangMai 1 Chiang Rai 1 Rai 4 Phitsanulok 1 Chanthaburi 1 Phatthalung 1 Surat Thani 3 Nakhon Pathom 1 Ubon Ratchathani 3 Nakhon Ratchasima 7

wage capital private&nonOBEC other rev FEP basic FEP poor

b. Secondary schools 40,000 30,000 Bahts per student 20,000 10,000 0 39 (Phitsanulok Uttaradit) 1 (Bangkok) 10 (Phetchaburi and other,) 20 (Udon Thani) 14 (Phang Nga Phuket Ranong)

wage capital private&nonOBEC other rev FEP basic FEP poor

Source: Thailand PETS, 2014.

By school size among primary schools, the largest difference, at 50 per cent, across districts emerged between small schools in Surat Thani 3 and in Sa Kaeo 2, with the former receiving 45,505 baht per student, while the latter received 91,445 baht per student. Other significant differences emerged: Phuket district’s medium-sized schools received the least, at 39,386 baht per student, while the same-sized schools in Phayao 1 received the most, at 67,672 baht, amounting to a 42 per cent difference. Large schools in Phuket received the least, at 29,772 baht per student, while the same- sized schools in Phitsanulok 1 (central region) received the most, at 50,425 baht—a 41 per cent difference.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 59 4. Budget allocation, release and spending in the Free Education Programme

Among secondary schools across districts, small secondary schools in Bangkok had the lowest level of resources, at 32,314 baht per student, compared with same-sized schools in Petchaburi district that received the highest level, at 48,452 baht, which amounted to a 33 per cent difference. Among medium-sized facilities, Phetchaburi district’s secondary schools received the least, at 36,984 baht per student, while the same-sized schools in Bangkok received the most, at 43,874 baht—a 16 per cent difference. Large secondary schools in Phang Nga, Phuket and Ranong districts had an average of 23,231 baht per student (the lowest level), while same-sized schools in Phitsanulok and Uttaradit districts had, on average, 44,004 baht (the highest level), amounting to a 47 per cent difference.

Recurrent (non-wage) resources within schools: Level and decomposition of inequality Moving beyond the allocated resources, the analysis now looks at recurrent resources other than capital and wages, which are transferred directly to teachers. In particular, potential inequalities across schools and categories of students—despite the FEP subsidies (which seek greater vertical equity)— are considered.

We measured inequality in the distribution of per-student (non-wage) recurrent resources using the Gini coefficient of inequality, which is the most commonly used index of relative inequality.6 The Gini coefficient varies from 0 (reflecting perfect equality) to 1 (reflecting perfect inequality). We also decomposed the Gini coefficient by income sources to identify the drivers of inequality in resources available across schools.7 We then assessed the impact of the removal of the poor student subsidy ceiling (currently at 40 per cent for primary schools and 30 per cent for secondary schools) on relative inequality.

The Gini coefficient of inequality was larger among primary schools (at 0.2030) than among secondary schools (at 0.1738), indicating relatively greater inequality in (non-wage) recurrent resources available per student among primary schools than among secondary schools (see last line of Table 4.19a, b).

Table 4.19: Gini decomposition, by (non-wage) recurrent income sources a. Primary schools Source Share income Gk Share % Change (1) (2) (3) (4) Other OBEC non-wage budget 0.0903 0.6259 0.1858 0.0955 Public non-OBEC budget 0.5132 0.3057 0.6366 0.1233 Private contributions 0.0533 0.8422 0.1514 0.0981 FEP basic subsidy 0.3148 0.0732 0.0264 -0.2883 FEP poor subsidy 0.0284 0.2221 -0.0002 -0.0287 Gini (recurrent resource/student) 0.2030

Note: Sample size=190 schools.

6 Inequality refers to an objective (quantitative) variation in the distribution of resources across schools, as measured through various measures of dispersion, such as the Gini coefficient.I nequity in resources refers to a normative (qualitative) assess- ment of the fairness in the distribution of resources that is of the desirability of the variation in the distribution of resources across schools. 7 The Gini decomposition is made using the Stata command ‘descogini’, which follows the approach described in Stark, Taylor and Yitzhaki (1986).

60 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 4. Budget allocation, release and spending in the Free Education Programme b. Secondary schools Source Share income Gk Share % Change (1) (2) (3) (4) Other OBEC non-wage budget 0.0665 0.5458 0.0794 0.0129 Public non-OBEC budget 0.0289 0.7477 0.0182 -0.0107 Private contributions 0.2351 0.6529 0.7628 0.5278 FEP basic subsidy 0.6227 0.0747 0.1493 -0.4733 FEP poor student subsidy 0.0469 0.2205 -0.0097 -0.0567 Gini (recurrent resource/student) 0.1738

Sample size=50 schools.

Source: Thailand PETS, 2014.

To identify the drivers of inequalities in recurrent resources, we deconstructed the Gini coefficient by income sources. In Table 4.19, ‘share income’ is the share of each income source in total (non-wage) recurrent income; ‘Gk’ is the Gini for each subcategory of revenue source and ‘share’ is the share of each income source in total inequality, while the last column (% change) refers to the impact that a 1 per cent change in the respective income source had on overall inequality.

Inequalities in the distribution of recurrent resources per student at the school level can be explained by (i) the share of schools’ income sources across categories and sectors (column 1) and (ii) the unequal distribution of these sources across schools (column 2).

(i) Important differences in revenue sources emerged between the primary and secondary schools. For primary schools, transfers from the public sector (other than OBEC), such as from local government and other central ministries, represented about 51 per cent of the recurrent revenue but less than 3 per cent of resources for secondary schools (see column 1).

Private sector contributions (parents’ contributions in school fees and support and donations from communities and businesses) represented nearly one fourth of the secondary schools’ recurrent resources but only about 5 per cent of recurrent revenue for primary schools (see column 1).

FEP subsidies were twice as important as a share of recurrent resources for secondary schools, compared with primary schools, representing about two-thirds of secondary school recurrent resources (62 per cent for the FEP overall and 5 per cent for the poor student subsidy) but only about one third of primary school recurrent resources (31 per cent for the FEP overall and 3 per cent for the poor student subsidy) (column1).

(ii) The unequal distribution of the income sources across schools, combined with their relative share in school resources, affected the inequalities in available resources per student. Examining the Gini coefficient for each subcategory of revenue source (Gk) revealed important inequalities in the distribution of specific revenue sources across schools (see Table 20a, b column 2), in particular, in the distribution of other OBEC transfers across schools (at a Gini coefficient of 0.6259 for primary schools and 0.5458 for secondary schools). Public non-OBEC transfers were also highly unequally distributed across schools, especially at the secondary level (at a Gini coefficient of 0.7477), but they represented a small share of school income. Private contributions to schools were highly unequally distributed across schools in both sectors (at a Gini coefficient of 0.8422 for primary schools and 0.6529 for secondary schools). The FEP, however, was highly equally distributed across schools (at

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 61 4. Budget allocation, release and spending in the Free Education Programme

a Gini coefficient of 0.07 for primary and secondary schools), while the FEP poor student subsidy presented a slightly more unequal allocation (at a Gini coefficient of 0.22 for primary and secondary schools), reflecting an uneven distribution of poor students across schools within the country.

The share of these various sources of revenue in the overall inequity in the distribution of recurrent (non-wage) resources per student is represented in column 3. In the primary sector, the public non- OBEC transfers constituted the main source of inequality in the recurrent resources, representing about 63 per cent of the inequalities. However, its effect was negligible among secondary schools. The uneven distribution of private contributions (from parents and the community) represented 76 per cent of overall inequality across schools in recurrent resources per students among the secondary schools. But among primary schools, private contributions were less determinant in recurrent resource inequality, representing about 15 per cent of the overall inequalities in (non-wage) recurrent resources per student.

The FEP subsidies contributed towards reducing inequalities in the distribution of recurrent resources per student and partly compensated for the various sources of inequalities in resources (see last column). Each 1 per cent increase in the FEP reduced inequality by about 0.29 per cent among primary schools and by about 0.47 per cent among secondary schools.

But the impact of the FEP poor student subsidy was relatively negligible at reducing inequality in recurrent resources per student. Each 1 per cent increase in the FEP poor student subsidy reduced inequality only by about 0.03 per cent among primary schools and by about 0.06 per cent among secondary schools. This represented only about 3 per cent of overall income for primary schools and 5 per cent for secondary schools.

FEP targeting of poor students The poor student subsidy is the only FEP component not allocated on a per-student basis and differentiates schools based on poverty rates within the student population; hence, it can potentially compensate for inequities across schools. However, it is currently not large enough or targeted sufficiently to compensate for the recurrent resource inequalities across schools. This is due to the current allocation ceilings and school-specific use of the subsidy. To reiterate, the poor student subsidy is allocated to schools, with a maximum threshold of 40 per cent of total enrolled students for primary schools and a 30 per cent threshold for secondary schools.

Using schools’ reported numbers of poor students enrolled in schools as defined by the FEP guidelines, the analysis looked at the percentage of coverage, given the thresholds of poor student subsidy in proportion to the total number of poor students reported in schools. As shown in Figure 16, the allocated poor student subsidy left about 45 per cent of the poor student population uncovered in the 2014/15 school year. In rural schools, the proportion of poor students not covered by the FEP poor student subsidy was almost half of all poor students enrolled in schools.

Another factor affecting the targeting and coverage of poor students is associated with schools’ practice of distributing the poor student subsidy to all students, both poor and non-poor, instead of providing transfers or in-kind services to the allocated share of poor students (or alternatively, the poor student population). As shown in Figure 16b, the number of students who received the poor student subsidy in the 2014/15 school year was twice greater than the allocated number of students, for both primary and secondary schools.

62 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 4. Budget allocation, release and spending in the Free Education Programme

Figure 4.16: Poor student subsidy, receiving coverage and spending coverage a. Receiving coverage: Allocated numbers of students and total amount requested First semester of the 2014/15 school year

Rural Urban Total 89 86 82 75 73 76 74 67 69 56 57 56 56 52 53 55 53 46 43 44 46 42 36 36

Small Medium Large Total Small Medium Large Total Primary Secondary

b. Spending coverage: Actual number of recipients and allocated numbers First semester of the 2014/15 school year

Rural Urban Total 180 171

168

165

170 162

159 158 158

160 154 151 149 148

150 138 137

140

126

130 124

119 116

120 111

108 110 106 100 100 Small Medium Large Total Small Medium Large Total Primary Secondary

Source: Thailand PETS, 2014. Source: Thailand PETS, 2014.

If most students were actually poor within the school population (and if thresholds were binding), it would be fair to presume that the school practice of universally allocating the poor student subsidy among the entire student body would promote fairness. However, such a practice clearly cannot replace proper targeting mechanisms. The current thresholds did not support fairness overall, given that the degree of poverty incidence was not uniformly distributed across schools, with rural schools especially experiencing more poverty rates than the average. The removing (or at least increasing) of the budget thresholds as well as better information about poverty levels in each school (which does not exist currently) would help improve the targeting towards the poor students and promote greater fairness in school resource availability across schools and communities.

Effect on inequality from the removal of the poor student subsidy thresholds Going back to Table 4.18, column 7 presents estimates of total per-student resources across categories of schools if the current 40 per cent and 30 per cent poor student subsidy programme thresholds

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 63 4. Budget allocation, release and spending in the Free Education Programme

were to be removed. If the FEP poor student subsidy was allocated without the current student threshold to all reported poor students in schools (column 7), the resources available per student would amount to 59,189 baht in primary schools and 39,973 baht in secondary schools. The required extra per-student transfer required in primary schools to remove this current budget constraint would be 1,437 baht per student in many schools and 2,147 baht per student in secondary schools (see column 8, which presents the net additional resources per student that would be required if all poor students were covered by the subsidy). Given the 3.7 million reported poor students in Thailand’s public school system in 2014, removing the budget constraint would represent an additional budget requirement of 5.9 billion baht for the public treasury.

The removal of this subsidy threshold would have considerable impact on the level of inequality in recurrent resources per student. As shown in Table 4.20a, b and c, if all poor students reported at the school level were covered by the subsidy, the Gini coefficient of recurrent resources would go down to 0.1888 in primary schools and 0.1411 in secondary schools. The full coverage would have a slightly more significant effect among primary schools, contributing to a 5.3 per cent reduction in inequality, compared with the 4.4 per cent reduction among secondary schools.

Table 4.20: Gini decomposition, by (non-wage) recurrent income sources a. Primary schools Source Share income Gk Share % Change (1) (2) (3) (4) Other OBEC non-wage budget 0.0814 0.6259 0.1743 0.0929 Public non-OBEC budget 0.4628 0.3057 0.5891 0.1263 Private contributions 0.0480 0.8422 0.1305 0.0824 FEP basic subsidy 0.2838 0.0732 0.0452 -0.2386 FEP poor student subsidy 0.0256 0.2221 0.0078 -0.0179 (with thresholds) FEP poor student subsidy 100% 0.0983 0.2819 0.0532 -0.0451 (all needy students) Gini (recurrent resource per student) 0.1888

Note: Sample size=190 schools. b. Secondary schools Source Share income Gk Share % Change (1) (2) (3) (4) Other OBEC non-wage budget 0.0554 0.5458 0.1126 0.0573 Public non-OBEC budget 0.0241 0.7477 0.0085 -0.0156 Private contributions 0.1958 0.6529 0.6547 0.4589 FEP basic subsidy 0.5187 0.0747 0.1760 -0.3426 FEP poor student subsidy 0.0391 0.2205 0.0038 -0.0352 (with thresholds) FEP poor student subsidy 100% 0.1670 0.3073 0.1219 0.0443 (all needy students) Gini (recurrent resource per student) 0.1411

Note: Sample size=50 schools.

Source: Thailand PETS, 2014 and authors’ calculation.

64 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 4. Budget allocation, release and spending in the Free Education Programme

4.9 Governance of the FEP

This section examines the role of ESAOs in the management and oversight of the FEP subsidies among schools.

4.9.1 Role and capacity of the Educational Service Area Office

ESAOs were established under the jurisdiction of the OBEC in 2002, in line with provisions in the 1999 National Education Act. Operating at the subprovincial level as local education authority units, the ESAOs are responsible for managing basic education delivery in their area. In FY 2013/14, there were 183 primary ESAOs and 42 secondary ESAOs operating in 76 provinces. Each ESAO is responsible for approximately 200 educational institutions, in which there are 300,000–500,000 students.

ESAOs are financed by OBEC through budgetary sources distinct from the FEP. In FY 2013/14, the total non-wage budget allocated to ESAOs amounted to 797.5 million baht. Approximately, 85 per cent of this budget was allocated equally to each ESAO to cover administrative costs, facilities and a quality improvement plan. Overall, the budget covers administrative functions and work related to schools. As previously noted, most FEP funding is directly transferred by the Policy and Planning Division to schools, except for the boarding student subsidy, which passes through the ESAOs.

The ESAO budget is allocated in two categories—personnel and operating expenses—through the GFMIS. The GFMIS covers all teaching personnel and support staff in schools and ESAOs (for wages and other compensation). The operating expenses cover routine education services (policy direction, supervising schools and monitoring) and school-quality improvements. Changes in the criteria for operating expenses tend to reflect budget availability and information used in the funding formula calculation.

On a discretionary basis and to support school operations, ESAOs allocate funds to the schools under their supervision through their operating budgets. As the data in Table 22 indicate, such transfers are small and represent an average of 30 baht per student in both primary and secondary schools. Patterns in these transfers were hard to discern; the transfers appeared largely determined by the ESAO directors’ discretion.

Table 4.21: ESAO budget and transfers to schools in the PETS sample

Received amount Transfer amount per Transfer amount per per school (baht) school (baht) student (baht) Primary ESAOs Chiang Mai 1 86,204 20,467 96 Chiang Rai 1 80,046 8,706 49 Chiang Rai 4 55,829 3,801 27 Phayao 1 86,109 0 0 Phayao 2 59,277 7,097 59 Phitsanulok 1 65,101 14,432 86 Nakhon Pathom 1 69,323 8,898 34 Lopburi 1 48,872 0 0

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 65 4. Budget allocation, release and spending in the Free Education Programme

Received amount Transfer amount per Transfer amount per per school (baht) school (baht) student (baht) Chanthaburi 1 102,015 5,814 26 Rayong 1 76,698 13,998 37 Sa Kaeo 2 65,107 1,613 9 Nong Khai 1 50,458 1,099 7 Kalasin 2 46,840 1,543 12 Ubon Ratchathani 3 39,322 0 0 Nakhon Ratchasima 7 34,320 1,140 7 Phatthalung 1 75,813 7,025 48 Trang 2 58,676 3,883 23 Surat Thani 3 55,573 0 0 Phuket 179,939 33,163 90 Average 70,291 6,983 32 Secondary ESAOs 39 (Phitsanulok Uttaradit) 137,557 14,655 19 1 (Bangkok) 123,856 2,015 1 10 (Phetchaburi and other 138,305 17,700 19 provinces) 20 (Udon Thani) 127,275 4,286 5 14 (Phang Nga, Phuket & 296,975 14,815 14 Ranong) Average 164,794 10,694 12 All 72,638 7,756 28

Source: Thailand PETS, 2014.

ESAOs also have a monitoring role over schools that involve supervision visits. According to the ESAO sample responses, schools have been visited on average only once a year. This is not surprising, considering the small number of ESAO personnel and the large number of schools under their responsibility. As Table 4.22 indicates, most visits related to FEP monitoring or general academic oversight.

Table 4.22: Frequency of schools visits by ESAOs

Supervision activities No. of visits No. of schools No. of visits per school 1. General visit 1,323 5,543 0.24 2. Academic supervision 1,437 5,543 0.26 3. Internal and financial audits 683 5,543 0.12 4. FEP and other monitoring 2,390 5,543 0.43 5. Building inspection 106 5,543 0.02 6. Class management 334 5,543 0.06 All 6,273 5,543 1.13

Source: Thailand PETS, 2014.

66 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 4. Budget allocation, release and spending in the Free Education Programme

Although the ESAOs do not have a budgetary role with the FEP, as the OBEC local authority they are instrumental in the programme’s implementation. According to the FEP guidelines, each ESAO has the following responsibilities: 1. Verify data inputted into the Data Management Centre by schools under their supervision. 2. Verify data and propose budget requests for boarding students. 3. Inform schools of their FEP budget envelope allocated by the Policy and Planning Division. 4. Oversee the appropriate use of funds by schools under their jurisdiction, including the collection of receipts for all FEP activity. 5. Monitor school activities through general visits, financial and internal audits, procurement audits and academic supervision.

To monitor FEP activity during the 2013/14 school year, the primary ESAOs visited only one in ten schools in their jurisdiction, while the secondary ESAOs made visits to about four in ten schools (see Table 4.23).

Table 4.23: Frequency of FEP activity visits, by ESAOs, 2013/14 school year (number of visits per school)

Primary ESAO No. of visits Secondary ESAO No. of visits Chiang Mai 1 0.54 39 (Phitsanulok & Uttaradit) 0.52 Chiang Rai 1 0.02 1 (Bangkok) 0.15 10 (Phetchaburi & other Chiang Rai 4 0.01 0.03 provinces) Phayao 1 0.02 20 (Udon Thani) 0.06 14 (Phang Nga, Phuket & Phayao 2 0.00 1.00 Ranong) Phitsanulok 1 0.02 Average 0.35 Nakhon Pathom 1 0.14 Lopburi 1 0.01 Chanthaburi 1 0.02 Rayong 1 0.03 Sa Kaeo 2 0.02 Nong Khai 1 0.15 Kalasin 2 0.01 Ubon Ratchathani 3 0.09 Nakhon Ratchasima 7 0.11 Phatthalung 1 0.11 Trang 2 0.05 Surat Thani 3 0.01 Phuket 1.00 Average 0.12

Source: Thailand PETS, 2014.

In their monitoring role, ESAOs report on the conduct of the FEP. As shown in Figure 4.17, three primary issues were cited in the survey for the 2013/14 school year: (i) difficulty in monitoring school use of the FEP budget according to the guidelines; (ii) monitoring and verifying data inputted into the Data Management Centre system; and (iii) reporting on FEP implementation.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 67 4. Budget allocation, release and spending in the Free Education Programme

Figure 4.17: Main problems with the FEP, as reported by ESAOs, 2013/14 school year

37.5 29.2 30.0 26.4

19.4 22.5 13.9 15.0 5.6 7.5 1.4 1.4 1.4 1.4 0.0

Note: DMC=Data Management Centre.

Source: Thailand PETS, 2014.

Overall, ESAO monitoring of FEP activity appears limited. Initially, the ESAOs collected the student information required for the FEP subsidy calculations; except for the boarding student subsidy, which is still based on ESAO information, increased school autonomy in recent years has meant that the inputs for the subsidy calculations by the Policy and Planning Division are now based on self-reported school information, including student enrolment and the poverty status of students. The ESAOs role has hence shrunk, additionally due to its capacity constraints. In such a context of self-reported information by schools and weak monitoring, there is considerable potential for schools to misreport information to increase their FEP allocation.

4.10 School environment: Teachers and school management

Various factors affect the quality of education services, including individual school characteristics, available resources and elements related to governance and institutional arrangements within schools. While the PETS collected information on FEP performance and the school FEP environment (which can affect school quality and learning), it also looked at the general environment and the quality of teachers’ interaction with pupils, including the prevalence of absenteeism of teachers (although the PETS timing coincided with the exam period, when there was no activity in the classroom). Because the administrative requirements of the FEP programme require teachers’ work time, their absence from the classroom or the school in general is a concern. The PETS also looked at school directors’ managerial skills and years of experience in relation to the efficient use of the FEP subsidies.

68 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 4. Budget allocation, release and spending in the Free Education Programme

4.10.1 Absenteeism

In countries with limited resources, teacher absenteeism tends to be an important problem (Chaudhury et al., 2006; Bold et al., 2010). In several low-income countries, highly centralized personnel systems, inadequate incentive systems and weak local accountability have resulted in high levels of staff absenteeism. Findings on absence rates from a large multicountry study found absenteeism rates among teachers to be between 11 per cent and 27 per cent, which translated into low-quality service (Chaudhury et al., 2006). Given that teachers’ absences lead to reduced teaching time, which in turn impact school results or participation rates of students, teacher absenteeism is an important issue. Das et al. (2004), for instance, found that with a 5 per cent increase rate of absenteeism, annual learning rates reduced by 4–8 per cent.

In the PETS, absenteeism among teachers was measured as the share of teachers not in school during two visits. In the first—announced—visit, 12 teachers were randomly selected from the list of all teachers. The enumerators then checked their whereabouts in a second—unannounced—visit.8 Survey evidence from several countries suggests that teachers are not necessarily teaching (at regular teaching hours) even if they are present at school. Thus, the PETS absenteeism survey measured the extent to which teachers were in school and actually in their classroom, as opposed to some other activity at the school.

The rates of absenteeism from school and classrooms were calculated taking all absences at the time of each visit into account, whether authorized or not. Although the enumerators recorded the motives for teachers’ absence, as reported by the school director, we followed previous studies and recorded all teachers as absent, regardless of the motive. This was justified for two reasons. First, it was not certain that the school director was able or willing to provide the correct motive for the absence. Second, what matters for student education is whether or not teachers are providing learning activities. Authorized or not, absence affects education services.

As indicated in Figure 4.18, about one in twelve teachers in Thailand’s public schools were absent from school on the day of the unannounced school visit. Interestingly, based on the sample data, the absence rate in primary schools was significantly higher than in secondary schools, and urban primary schools were more significantly affected by absenteeism than the rural primary schools.

The findings on absence from the classroom were especially striking in the secondary schools (see Figure 4.18b). More than 60 per cent of secondary school teachers were absent from their classroom, both in urban and rural schools, while 75 per cent of teachers were absent in small urban secondary schools. In contrast, only 18 of the primary school teachers were absent from the classroom in rural schools and 24 per cent of the teachers in urban schools were not there. However, as noted, the survey was conducted during the end of the school year when examinations take place and there are no class activities.

8 Because the information is based on one unannounced visit only, the estimate for each school is likely to be imprecise. By averaging across schools, however, these measurement error problems are likely to be less of a concern.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 69 4. Budget allocation, release and spending in the Free Education Programme

Figure 4.18: Teacher absenteeism a. Absenteeism from school (% of teachers)

Rural Urban All

20

16 14

10 10 10 9 9 8 7 8 6 7 6 5 5 5 6 5 5 5

2 0 0

Small Medium Large Total Small Medium Large Total

Primary Secondary b. Absenteeism from school and classroom (% of teachers)

Rural Urban All

75 67 67 66 64 65 64 64 64 59 58 59

31 24 21 21 21 20 18 19 16 16 15 10

Small Medium Large Total Small Medium Large Total

Primary Secondary

Source: Thailand PETS, 2014.

Table 4.24 presents the findings on absenteeism from school and the classroom according to the teachers’ characteristics as well as the reported reasons for the absence. Almost twice as many male teachers than female teachers were absent from school and their classroom. Teachers with less than a bachelor’s degree were significantly more absent, especially from their classroom.

The main reasons offered for teacher absenteeism was training (14 per cent), other types of authorized absence (13 per cent), school-related meetings or missions (11 per cent) and illness (9 per cent). As pointed out, previous research has shown that it is best to consider all types of absence, given that it is unclear whether absence motives are truthful and because, ultimately, students need teachers to be present for learning activities to be provided, regardless of the motive for the absence.

70 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 4. Budget allocation, release and spending in the Free Education Programme

Table 4.24: Characteristics of teachers who were absent and reasons for their absence a. Characteristics

Absence from Absence from % % of teachers school classroom Female 114 6.78 345 20.5 Male 81 11.25 267 37.1 Total teachers 195 18.03 612 25.4 Directors 32 15.46 106 13.0 Regular teachers 148 7.51 535 32.8 Hired teachers 5 3.82 17 28.6 Experience < 5 years 40 7.62 171 20.5 Experience of 5 157 8.35 535 37.1 years at least

b. Reasons for absence from school and classroom Reason Frequency % Sick 18 8.61 In training 30 14.35 Official mission or school-related 24 11.48 meetings Approved absence 27 12.92 Go to bank 8 3.83 Other 102 48.8 Total 209 100

Source: Thailand PETS, 2014.

Various factors could affect teacher absenteeism, including the administrative requirements associated with the FEP. School personnel and, in particular, teachers are expected to devote a part of their workweek managing implementation of the programme. For the poor student subsidy for instance, tasks include identifying poor students, visiting their household and opening and managing bank accounts for them.

Figure 4.19 presents the share of teachers’ time per week devoted to FEP-related work and other administrative tasks. Administrative activities consumed about 11 per cent of teachers’ workweek in the primary and secondary schools. These activities took up more time in urban areas, at 14 per cent for primary school teachers and 15 per cent for secondary school teachers.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 71 4. Budget allocation, release and spending in the Free Education Programme

Figure 4.19: Share of work week devoted to FEP and other administrative work (% of teaching hours)

Rural Urban All

16 17 15 14 15 15 13 12 11 11 11 12 10 11 11 11 10 10 9 9 9 9 9 4

Small Medium Large Total Small Medium Large Total Primary Secondary

Note: Regular teaching hours: 25 hours per week for primary school teachers and 35 hours per week for secondary school teachers.

Source: Thailand PETS, 2014.

Various other reasons not directly related with the FEP implementation could affect teachers’ absenteeism behaviour and teaching quality. Table 4.25 presents levels of teacher satisfaction; desire to relocate to another area and turnover rates. Dissatisfaction with work especially affected the school teachers (15 per cent) in the sample and those in urban areas (11 per cent). While one fourth of primary school teachers said they wanted to relocate to another area, one third of the secondary school teachers reported similar interest. Turnover rates were also higher among secondary schools teachers, at 7 per cent.

Table 4.25: Teachers’ satisfaction in their work, desire to relocate and turnover a. Satisfaction (%)

Satisfaction level Frequency % Rural Urban Primary Secondary

Not satisfied 145 6.9 3.9 11.2 2.4 14.6

Indifferent 54 2.2 2.1 2.3 2.0 2.7

Satisfied 2,263 91.9 93.4 86.5 95.3 82.7

Total 2,462 100 100 100 100 100 b. Teachers’ desire to relocate (%)

Answer Frequency % Rural Urban Primary Secondary

No 1,837 74.6 73.4 81.0 77.2 65.5

Yes 624 25.4 26.3 19.0 22.5 34.5

Total 2,462 100 100 100 100 100

72 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 4. Budget allocation, release and spending in the Free Education Programme c. Percentage of teacher turnover Size Rural Urban All Primary school Small 5.95 0 5.63 Medium 6.41 4.55 6.37 Large 4.24 4.75 4.43 Total 6.02 3.47 5.81 Secondary school Small 8.55 3.85 8.3 Medium 7.69 6.02 7.2 Large 6.01 6.5 6.43 Total 8.07 6.22 7.4 All 6.40 5.07 6.20

Source: Thailand PETS, 2014.

4.10.2 School directors

The quality of education services relate to the quality of a school’s director. This function also contributes to the effectiveness of the FEP and to the favourable atmosphere for learning within the school as well as in the supervising, motivating and incentivizing teachers. As shown in Table 4.26, school directors were on average 53 years old (about three years older in large and urban schools), with on average 18 years of education (equivalent to a master’s degree or a teacher’s degree) and had been in the director’s position for an average of 14 years. Only 16 per cent of the directors in the sample were women. Large and urban schools had older and more experienced directors.

Table 4.26: School directors’ characteristics, by school size, level and location

Small Medium Large Primary Secondary Rural Urban All Age 52.89 53.21 55.85 53.5 52.92 53.2 54.84 53.4 % women 15.84 20.73 18.52 18.13 17.95 18.38 16.00 18.10 Years of 17.7 17.8 18.19 17.7 18.28 17.79 17.88 17.8 education Years in 5.87 5.2 3.67 6.08 2.03 5.56 3.56 5.33 this school Years in director 12.92 14.17 18.52 14.82 11.08 14.03 14.84 14.13 position Years of 30.08 31.54 35.03 31.24 31.46 30.84 34.59 31.28 experience

Source: Thailand PETS, 2014.

4.10.3 Parents

In Thailand, parents have opportunity to participate in the management of their children’s school and in the FEP management in particular. In the survey, parents reported satisfaction with the FEP support. Unfortunately, the household survey did not cover the level of parents’ participation in the FEP to derive some indicator of programme transparency. Information about the FEP was largely known by most of the household respondents, with the exception of the poor student subsidy. Responding parents did not quite recognize the subsidy for the poor the same way they know about the support

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 73 4. Budget allocation, release and spending in the Free Education Programme

for uniforms and learning materials. This fact reflects how most schools choose to manage this particular subsidy themselves, which is not against the FEP guidelines. The objective of the poor student subsidy, however, should be articulated throughout the school community.

One possible proxy for parents’ participation could be the level of school fees they pay, on the postulation that high school fees motivate parents to be more involved in school management. As shown in Table 4.27, parents on average paid an additional 11,712 baht per student in the 2013/14 school year. The biggest share of the additional expense was school fees, followed by tutoring expenses and school transportation.

Table 4.27: Parents’ contributions (baht per student per year)

Items Amount (baht) % Uniforms 652 6 Learning materials 286 2 School fees 5,169 44 Parents’ association 356 3 School transportation 367 3 Tutoring 4,086 35 Other 795 7 Total 11,712 100

Source: Thailand PETS, 2014.

4.11 Links between FEP and student performance

The goals of the FEP are to improve education quality and access and ultimately improve student performance. This section thus looks at the links between education quality, including the FEP and other school resources, and student performance. If schools use resources efficiently, a relationship between those resources, education quality and student performance should appear as positive. In particular, greater school resources should be associated with improved learning. However, the empirical evidence of this relationship in Thailand and other countries is mixed (Hanushek, 2010; Punyasavatsut, 2013). The diverse conclusions are in part due to estimation difficulties and to differences in study contexts.

Most studies on the effect of additional resources on student performance largely ignore efficiency in their use at the school level. If schools do not transform resources into outputs, then a positive link between the school resources and performance is hard to achieve. The PETS allows for the devising of various inefficiency indicators, such as delay in budget transfer, leakage of resources and poor monitoring or unclear guidelines in budget spending.

In addition to raising student performance, education policy may aim to strengthen equity in resource distribution by targeting schools with more needy students. Thai rural schools with relatively more poor students receive larger FEP subsidies per capita through the poor student subsidy, leading to larger per-student spending. Small rural schools experience a lower student-teacher ratio due to declining numbers of enrolled students and significantly higher per-student spending than medium- sized and large schools (see Figure 4.20). In the 2013/14 school year, small primary schools spent

74 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 4. Budget allocation, release and spending in the Free Education Programme about 56,458 baht per student, compared with 26,175 baht per student in the large primary schools. Small secondary schools also spent more per student than the large secondary schools.

Figure 4.20: FEP resources and total school expenditure per student, 2013/14 school year a. FEP resources per student (baht)

Rural Urban All

8,000 7,394 7,369 7,367 7,500 7,082 6,985 6,984 6,773 6,671 7,000 6,654 6,396

6,500 5,934 627

6,000 5, 5,500 5,000

4,537

4,362 4,354 4,198 4,500 4,179 4,090 4,076 787 770 742 3,938 3, 3, 4,000 3, 3,524 3,500 3,000 Small Medium Large Total Small Medium Large Total

Primary Secondary b. Total school expenditure per student (baht)

Rural Urban All

60,000 56 ,476 56 ,458 56 ,055

55,000

50,000 47 ,239 46 ,501 358 45,000 , 40 ,463 40 39,691 39,001 38,684 37,654 40,000 37 ,224 36,675 36 ,364 35,839 34,912 35,000 30 ,215 30,037 28 ,023

30,000 27 ,221 26 ,722 26,584 26 ,175 25 ,038 25,000

20,000 Small Medium Large Total Small Medium Large Total

Primary Secondary

Source: Thailand PETS, 2014.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 75 4. Budget allocation, release and spending in the Free Education Programme

Figure 4.21 illustrates the findings on declining per-student school spending with increased school size. However, greater school spending may not necessarily translate into higher student performance because it does not imply better teacher quality, only potentially inefficient and expensive use of teachers in these small schools. More than half of the OBEC schools are defined as small (having fewer than 120 students). In the 2013/14 school year in the small primary schools, the student-teacher ratio was 12:1, compared with 15:1 in the medium-sized primary schools and 22:1 in the large primary schools.

Figure 4.21: Relationship between school size and per-student spending, by primary and secondary schools a. Primary school 8 6 4 2 Per-student School Expense (10,000 Baht/year)

0 .5 1 1.5 School size (Number of Students in 1000)

b. Secondary schools 6 5 4 3 2 Per-Student Spending (10,000 Baht/year) (10,000 Spending Per-Student 1

0 1 2 3 4 School Size (1,000 students)

Source : Thailand PETS,2014.

76 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 4. Budget allocation, release and spending in the Free Education Programme

Parents’ contribution to school revenue has been found to be important for student learning (Rothstein, 2012). Among the schools in the survey sample, those located in richer areas (and mainly the large schools) received more private contributions than the small schools, which had to accommodate a larger share of poor students (see Figure 4.22).

Figure 4.22: Parents’ contributions and percentage of poor students .8 .6 .4 Percent of Poor Student (%) Percent of .2

0 2000 4000 6000 8000 Parent contributions (Baht/student/year)

Source: Thailand PETS,2014.

To examine the relationship between school inputs, including the FEP subsidies, and the inefficiency indicators, student performance was used as a proxy, based on average scores from the Ordinary National Education Test (ONET), a standardized student test conducted yearly by the Office of National Education Standard and Quality Assessments. ONET examinations are conducted at Grades 3, 6, 9 and 12. Table 4.28 shows the average of scores for all the schools in the PETS sample in five subjects (mathematics, science, social studies, English and Thai). The average ONET scores for the schools in the survey sample were slightly lower than the national averages, at all grades reviewed.

The average score for the Grade 6 exam was only 38.1 per cent overall, compared with the national average of 42.4 per cent. Among the primary schools, it was slightly higher in urban schools (at 43.1 per cent) than in the rural schools (at 37.7 per cent). In secondary schools, the Grade 9 exam result score was 34 per cent on average (38.4 per cent in urban schools and 33.1 per cent in rural schools), compared with the national average of 35.5. The Grade 12 exam produced even lower results, with the overall average score at 30.1 per cent (34 per cent in urban schools and 27.9 per cent in rural schools), compared with the national average of 33 per cent. Various factors could contribute to low test score results, including the unofficial practice of not allowing grade repetition in public schools in Thailand in order to increase enrolment.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 77 4. Budget allocation, release and spending in the Free Education Programme

Table 4.28: Average O-NET scores of the school sample, by school size, 2013/14 school year a. Grade 6 Size Rural Urban All Primary school Small 37.93 39.93 38.02 Medium 36.96 36.68 36.95 Large 40.71 46.29 42.83 Total 37.72 43.1 38.11 b. Grade 9 Size Rural Urban All Primary school Small 33.78 33.78 Medium 32.69 32.69 Large 33.11 34.16 33.26 Total 32.96 34.16 32.98 Secondary school Small 32.86 31.31 32.78 Medium 33.29 32.82 33.15 Large 33.41 41.27 40.15 Total 33.06 38.37 34.97 c. Grade 12 Size Rural Urban All Secondary school 27.45 24.77 27.3 Small Medium 28.16 28.87 28.37 Large 29.45 36.84 35.79 Total 27.85 33.96 30.1

Note: Total score is 100 points. National average scores of Grades 6, 9 and 12 are 42.4, 35.5 and 33, respectively.

Source: The National Institute of Educational Testing Service.

As shown in Table 4.28, the average test scores at all grades increased with school size, except for primary schools, where a U-shape relationship was found, with the medium-sized schools showing the lowest test scores.

In line with the literature on the relationship between student performance and school resources, we regressed the school-average ONET scores with school resources, school characteristics and other potential determinants, such as teacher quality, teacher shortage, ratio of poor students, parent contributions and efficiency of school resource management. As a proxy for school resource management efficiency, we used delays in resource transfers, budget information delay and teacher absence from schools. To reduce omitted-variable bias of the estimate of the school expenditure coefficient, we added past school-average test scores, which captured the same group of students who took the test, in the regression. Table 4.29 provides descriptive statistics of the variables used in the regression analysis (Table 4.30 presents the regression results).

78 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 4. Budget allocation, release and spending in the Free Education Programme

Table 4.29: Descriptive statistics of variables in the regression model

Primary Secondary Unit of Variables Standard Standard measurement Mean Mean deviation deviation Test scores Points 38.1 5.9 35.0 5.3 Past test scores Points 46.4 8.6 35.6 6.2 School expense per student Baht/student/year 46,501 17,841 34,912 12,329 FEP per student Baht/student/year 4,179 994 6,773 1,643 % of poor students % 64 27 42 26 Average salary per student Baht/student/year 39,718 17,352 25,277 11,792 Teacher quality (% of teachers with % 12 10 15 8 master’s degree) Parental contribution per student Baht/student/year 1,627 1,703 7,361 8,056 Information delay Number of days 74 17 71 22 Real resource delay (books, learning Days 2.4 10.6 25.0 41.9 materials and uniforms) Directors’ years of experience Years 30 8 32 6 Students per Student-teacher ratio 14.2 4.3 16.2 3.4 teacher Percentage of Teacher absence from school 8.8 14.1 5.0 7.5 teacher Number of school visits by ESAO Visiting per year 8.0 4.8 6.4 4.0 School size Number of students 285 507 1,105 1,000 Numbers of observation Number of school 190 50

Source: The National Institute of Educational Testing Service and Thailand PETS, 2014.

In terms of per-student school expenses, the relationships with test scores is represented as a U-shaped relationship in the primary schools and as a negative-slope linear relation in the secondary schools (see Figure 4.23).

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 79 4. Budget allocation, release and spending in the Free Education Programme

Figure 4.23: Average test scores (ONET) and school expenditure per student a. Primary school, Grade 6 45 40 35 ONETScores grade 6 30 2 4 6 8 10 Per-student expenses (in 10000 Baht/year)

b. Secondary school, Grade 12 50 45 40 35 ONET Score Grade 12 ONET 30 25

0 2 4 6 8 Per-Student School Expenditure (in 10,000 Bahts)

Source: Thailand PETS, 2014.

The regression results indicate that teacher quality, as measured by the percentage of teachers with a master’s degree or higher, has a positive and significant impact on student performance at the primary school level (see Table 4.30a). Large differences in per-student spending did not influence scores, after controlling for efficiency variables in spending (columns 4–6). Scores among primary schools in rural areas and the north-eastern region were found to be considerably lower than in other regions.

80 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 4. Budget allocation, release and spending in the Free Education Programme

Interestingly and although not statistically significant from zero, the efficiency variables yielded relationships consistent with the theory. Resource and information delays, teacher absence from school and teacher shortages negatively related to student performance at the primary school level.

As shown in Table 4.30b, there is strong evidence that at the secondary school level, parents’ contribution had a positive and significant impact on student performance. Generally, household expenditure at the secondary school level was larger than at the primary school level. Again, higher per-student spending at school level did not influence test scores significantly at the secondary school level. The test scores among secondary schools in rural areas were significantly lower than in urban areas, while they were not statistically different across regions. Even though better teacher quality did not statistically explain scores at the secondary school level, teacher shortage was a strong predictor of student performance. Similarly, efficiency variables yielded consistent relationships with scores, although their point estimates were not much different from zero.

Of particular interest, strong and important evidence was found to indicate the significance of teacher quality in explaining student performance in primary education. First, the data indicate that teacher quality in primary schools was not related to their salary or level of experience. In the Thai education system, teachers’ salaries increase with age and may not automatically translate into better teaching quality. And on average, primary school teachers are relatively older, at about 45 years old. Policy aiming at improving learning quality would need to provide teachers with in-service training to help improve their knowledge level and pedagogical competencies. Second, teacher shortages negatively affected student test scores in secondary schools. The available data suggest that the secondary schools in the sample, and those mostly in rural areas in Thailand, lack qualified teachers in some academic subjects, such as science and mathematics. Policies to reduce this shortage would need to improve the incentives for joining the teaching profession and to reallocate teachers, using adequate incentives towards areas in need. Third, parents continued to pay extra support for their child education in the form of additional school fees, in particular for secondary education. The regression analysis indicates that larger parental contributions led to higher scores. Fourth, the observed relationship between test scores and school spending per student (see Figure 4.23) disappeared once such factors as the efficiency of resource use and family background or contribution were taken into account.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 81 4. Budget allocation, release and spending in the Free Education Programme

Table 4.30: Regression analysis between test scores and their determinants a. Primary schools: Dependent variable was the Grade 6 scores (N=190 schools) (1) (2) (3) (4) (5) (6) School spending per student 0.553* 0.600* 0.524* 0.466 0.114 0.3561* (1.78) (1.92) (1.68) (1.38) (0.43) (1.32) Teacher quality 0.0755* 0.0801** 0.0771* 0.0792* 0.0724* 0.0784* (1.91) (2.03) (1.95) (1.94) (1.77) (2.01) Size (in log) 1.380** 1.286* 1.124 1.115 (2.09) (1.86) (1.60) (1.56) Rural (dummy) -3.182* -2.529 -3.055* (-1.89) (-1.41) (-1.70) Past scores 0.234** 0.230** 0.227** 0.212** 0.204** 0.195** (4.86) (4.74) (4.69) (4.23) (4.07) (4.04) North-eastern region (dummy) -2.769** -2.478** -2.585** -2.628** -2.673** -3.051** (-2.45) (-2.16) (-2.26) (-2.03) (-2.06) (-2.65) Percentage poor students -1.612 -1.620 (-0.90) (-0.88) Parents’ contribution 0.399 0.312 0.391 0.444 -0.2332 (1.37) (1.04) (1.33) (1.55) (-0.69) Resource delays -0.0352 -0.0380 -0.0354 (-0.87) (-0.94) (-00.90) Teacher absenteeism -0.0169 -0.0161 -0.199 (-0.58) (-0.55) (-0.72) Directors’ years of experience 0.0570 0.0660 (1.06) (1.26) Percentage teacher shortage -0.0262 -0.0289 -0.0167 (-0.78) (-0.86) (-0.49) Information delay -0.0812 -0.0719 (-0.33) (-0.29) Student-teacher ratio

School size (in 1,000) 4.2239 (3.60) Percentage foreign students -0.0346 (-1.42) Electricity problems (dummy) -1.4567 (-1.58) Internet problems (dummy) -1.5157 (-1.88) Teacher turnover -0.0339 (-1.43) Constant 29.64** 26.87** 28.46** 27.88** 29.29** 31.47** (9.59) (9.10) (8.64) (5.47) (5.41) (8.93) R2 0.208 0.208 0.213 0.222 0.219 0.286

Note: t statistics in parentheses. * Significance at 10%, ** significance at 5%.

Other regional dummies are not shown in the table.

82 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 4. Budget allocation, release and spending in the Free Education Programme

b. Secondary schools: Dependent variable is Grade 12 scores (N=50 schools) (1) (2) (3) (4) (5) School spending per student 0.234 0.467 0.197 0.189 0.172 (0.65) (1.47) (0.56) (0.50) (0.49) Teacher quality 0.0449 -0.0270 (0.75) (-0.49) Region 2 0.331 -2.281* -1.102 -1.085 -1.565 (0.27) (-1.84) (-1.00) (-0.96) (-1.36) Region_3 -2.043 -2.432* -1.372 -1.371 0.651 (-1.37) (-1.85) (-1.20) (-1.19) (0.34) Past scores 0.722** 0.609** 0.601** 0.600** 0.587** (9.97) (8.82) (8.80) (8.47) (8.55) Rural -2.515** -1.819* -1.818* -2.724** (-2.37) (-1.76) (-1.74) (-2.19) Parents’ contribution 0.134* 0.160** 0.161** 0.170** (1.96) (2.24) (2.20) (2.40) Resource delay -0.00480 -0.00456 -0.00313 (-0.53) (-0.47) (-0.35) Directors’ years of experience 0.0734 0.0732 0.0622 (1.19) (1.17) (1.01) Percentage of teacher shortage -0.0639* -0.0641* -0.0578* (-1.91) (-1.89) (-1.72) Monitoring effort 0.00864 (0.08) Information delays -0.836 (-1.28) Constant 2.969 9.417** 7.511** 7.512** 15.83** (0.90) (2.80) (2.13) (2.11) (2.15) R2 0.742 0.817 0.839 0.839 0.846

Note: t statistics in parentheses. * p < 0.10, ** p < 0.05, *** p <0.01.

Source: Authors’ calculation from Thailand PETS, 2014.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 83 © UNICEF Thailand/2011/ M.Thomas 84 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 5. Concluding remarks and recommendations

5.1 Concluding remarks

The FEP is an important programme of the OBEC (Ministry of Education), as stipulated by the 2010 amended National Education Act. It was designed to support all young Thai people in exercising their equal right to receive basic education of quality and free of charge for at least 12 years. It was later extended to cover an additional three years of pre-primary education.

As discussed and analysed in chapter 4, the PETS revealed many issues with the FEP in Thailand’s public school system: • Lack of specific timelines for FEP management is associated with delays in budget management at the central level and transfers to schools. Significant delays in budget petition and budget disbursement occur at the central level, especially at the beginning of the budget cycle, which cause FEP subsidies to reach schools and students late during each school semester.

• The non-executed FEP budget at the central OBEC level, which totalled about 5.6 per cent of the planned FEP envelope for FY 2013/14, is associated with discretion in use, given imprecise guidelines. The unused funds at the Policy and Planning Division, amounting to 2,273 million baht, are attributed in part to a decline in student enrolment and to the rationing of the poor student subsidy. Given the imprecise FEP guidelines, the unused funds are associated with discretionary final use by the Policy and Planning Division (which has historically used the funds to pay school utility bills).

• Weak information transmission and the bulk nature of the financial transfers to schools leads to problems of assignment of the funds across subsidy categories and an increase in the fungibility of funds at the school level. Financial transfers of FEP subsidies to schools, made electronically by the OBEC Treasury to school bank accounts, are allocated in bulk, mixed together with other programme funding and without information accompanying the transfer on the fund composition. This leads to problems of fund assignment at the school level and to increased fungibility across subsidy categories and programmes.

• Weak financial accounting at the school level and of information transmission to higher administrative levels leads to inaccurate accounting of the FEP funds. The financial accounting system at the school level is characterized by lack of capacity and a weak system for relaying information about the FEP funds within schools and to higher administrative levels. Given the poor quality of financial records and the lack of a standardized mechanism for schools to account for resource use (either electronic or paper based) and the poor recordkeeping practices, the PETS data collection of information on allocated budgets and spending was arduous and often imprecise among the sample schools, with systematic errors in accounts attributed in part to schools not managing the transfers by subsidy categories. Poor accounting makes it difficult to assess programme results and efficiency of use at the school level and increases the risk of fund leakage, fungibility or use not consistent with the programme’s purpose or rules.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 85 5. Concluding remarks and recommendations

• Unclear FEP guidelines for fund use at the school level leads to various rule interpretations by school administrators, giving rise to discretion and variations across schools in the provision of subsidies to beneficiaries. The FEP guidelines at the school level are imprecisely defined and weakly enforced, in particular regarding subsidy use and modalities for transferring subsidies to households (for uniforms, poor students, books and leaning materials). School administrators tend to have various interpretations of the rules, giving rise to their discretionary use and thus variations across schools in the provision of subsidies to beneficiaries. Associated with the imprecise rules are difficulties in verifying compliance with programme’s guidelines for each subsidy category. For instance, the FEP guidelines restrict the use of the subsidy to “financial transfer to parents”, but the rules are not always clear-cut and, in practice, some schools allocate subsidies to students in-kind or use the subsidy for other purposes.

• Weak monitoring and accountability within the programme. School self-reporting of information and limited ESAO supervision compound the moral hazard among schools. ESAOs initially collected the student information required for subsidy calculations, but increased school autonomy in recent years has meant that—except for the boarding student subsidy, which is still based on ESAO information—inputs for subsidy calculations by the Policy and Planning Division are now based on self-reported school information, including student enrolment and student poverty status. ESAOs have limited supervision capacity and struggle with resource-capacity constraints. For instance, in FY 2013/14, the ESAOs conducted on average only one supervision visit per school for FEP monitoring purposes. Accountability is also weak across the government agencies involved in the programme’s implementation. In the context of weak monitoring, schools face incentives to misreport self-reported information in order to increase their FEP allocations.

• The coexistence of several school systems under various jurisdictions and little information sharing among them—compounded by schools’ practice of keeping students on records for some period of time after they stop coming to class—create possibilities of fictitious (ghost) students, leading to potential distortions in the FEP subsidy allocations, education statistics and resource leakage. Distortions in FEP allocations to schools are potentially created by possibilities of ghost (fictitious) students associated with the non-integration and absence of data sharing among the two public school systems (one under the jurisdiction of OBEC and the other under the LAO responsibility) and a private primary and secondary school sector under OPEC jurisdiction (which also receives FEP support). The little information sharing between the three school systems on student enrolments and student identification lists, compounded by the practice of keeping students on school records even after they have dropped out or moved away (and enrolled in another school system, private or public), leads to the double counting of students.

• This redundancy of students was amplified by the practice in some schools of not discharging non-active students and not reporting their whereabouts. Some school officials reported keeping students on their lists after they had dropped out with the rationale that they may come back. Such a practice, which leads to underreported drop-outs and overreported enrolment, could explain the low rate of school drop-outs within the OBEC school system, which is often at odds with the statistics from other education sources. Retaining ghost

86 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 5. Concluding remarks and recommendations

students, especially ‘poor ghost students’, creates possibility for resource leakage, given that schools with fictitious students would receive more budgetary transfer than what they are otherwise entitled to.

• Poor student identification and management of subsidies is time consuming and arduous for school officials and teachers, leading to potential biases in beneficiary selection and reduced teaching time for students. The management of the poor student subsidy poses problems to schools. Determining the beneficiaries of the poor student subsidy is done without guidelines, leading to potential discretion by school teachers and variance in the criteria used across schools. The management of the subsidy, which involves identifying poor students, verifying their household poverty status, managing the funds and transfers and, in some cases, managing poor students’ bank accounts, is generally left to teachers. These activities are time consuming and lead to potential trade-offs by teachers between their administrative duties to implement the programme and teaching time. Teachers’ reported that their major impediment to teaching was the time spent on administrative work and for training. There is a further vicious circle in poorer school areas, where teachers spend a greater share of their work week on identifying poor students and managing their subsidy, which leads to increased classroom absenteeism and reduced teaching time. The administrative burden in managing the programme, which then translates into greater teacher absenteeism, is more severe in small schools already struggling with staff shortages.

• The rationing of the poor student subsidy, mixed with schools’ practice of allocating that subsidy to all students in-kind, is inequitable and inefficient. The rationing of the poor student subsidy to 40 per cent and 30 per cent of total enrolled students at the primary and secondary levels, respectively, reduces the financial transfer to poor households and is associated with inadequate targeting at the school level, thus affecting vertical equity. Most schools reported using the rationed poor student subsidy to provide services to all students, poor and non-poor. According to surveyed school directors, this practice aims to reduce disputes and disparities among poor households and give access to some benefits to excluded households, especially in small rural schools in which most students could be considered poor. However, such a practice of sharing limited subsidy benefits with ineligible students reflects a school’s inability to screen students by poverty level and reach needy poor students. It also reflects the lack of guidelines given to schools for managing the poor student subsidy. Ultimately, the practice of using the poor student subsidy budget without targeting only poor students is inequitable and dilutes the already reduced per-head poor student subsidy transfer reaching poor students. The lack of targeting of the poor subsidy is also a form of resource leakage because allocating funds to all students, even those from households with sufficient income, reduces the subsidy amount given to poor students.

• The management of the poor student subsidy is confronted with problems of transparency and accountability and associated with poor students’ attendance and retention in schools. Management by schools of the poor student subsidy takes various forms. A minority of schools choose to transfer the subsidy as cash to households. In such a case, according to the FEP guidelines, schools are to keep records of the transfers, which are to be signed by at least three school committee members. Schools are allowed to have teachers allocate the subsidy to students directly or transfer into the students’ bank accounts. Schools can also

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 87 5. Concluding remarks and recommendations

provide the subsidy in-kind to students through various services (meals, transportation, uniforms)—a practice adopted by about three-fourths of the surveyed schools. The survey data indicate that most households in the sample did not receive the poor student subsidy as cash. A large share of the poor student subsidy budget appears to remain unused at the school level, remaining in school bank accounts or school-managed student accounts. Overall, there is limited transparency surrounding the FEP because most schools do not share information with parents about the programme, and most households do not have knowledge of the poor student subsidy. Smaller transferred allocations and overall lack of knowledge and transparency about the programme reduce the impact on poor students’ attendance and retention in school.

• Insufficient budget to support the FEP objectives.The FEP was designed to ease parents’ financial burden for education and increase student enrolment through free basic education services. Despite the elimination of school tuition accompanying the FEP implementation, schools are still allowed, with school board approval and parent consent, to impose special fees for additional core curriculum activities, foreign teacher hiring, ICT and special learning programmes. The survey data indicate that school fees are imposed to support student development programmes, which tend to require relatively important school resources. This autonomous revenue from the community and other sources show important variance. Some schools do not raise sufficient autonomous revenue, limiting their capacity at even providing the various tasks required in the FEP objectives. The current FEP subsidy mechanism does not provide any supplementary budget for such school programmes or for needy students, which thus affects schools’ capacity and teachers’ incentives at developing pedagogical innovations, local curriculum or vocational training—which tend to be relatively more costly than core curriculum activities.

• Inequalities across schools in terms of overall resources available and education quality occur largely due to the unequal distribution of human resources across school locations and sizes, which are associated with variations in the distribution of teachers’ experience (in remote or urban schools). Inequalities also arise from differences in private resources collected by schools (through parents’ fees and local business and community donations) across locations and communities. Total resources available per student tend to decline significantly with increased school size. Total resources available per student in small primary schools are twice that of large primary schools and 18 per cent greater than what is available in large secondary schools. Public schools in rural areas, both primary and secondary, receive substantially more resources per student than those located in urban areas. However, greater overall resources per student in small and in rural schools do not imply improved learning outcomes. The economies of scale in school operations allows larger schools opportunity to reduce their resource costs, thus helping them keep their education quality constant.

• Various factors associated with school characteristics, including the level of FEP resources, as well as factors present in the school environment—in particular teacher allocation, distribution of schools across locations and household socio-economic conditions—leads to inequity in education quality and student performance. The PETS found that delays in resource delivery to schools, along with teacher absence from school,

88 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 5. Concluding remarks and recommendations

were associated with lower student test scores, based on the ONET test scores among the sample schools. Test performance was also found to be lower among students in primary schools with a high incidence of poverty, reflecting insufficient targeting to poor schools and an insufficient amount of the poor student subsidy.

• The unequal distribution of teachers across locations and school categories is chief among factors in the school environment that affect equity in resources available to students, education quality and results. Although the posting of teachers across schools is the responsibility of the central ministry, teachers have an option to relocate after two years. There is a problem of teacher retention in less-appealing regions and schools. Understaffed and overstaffed schools are evident, due largely to the limited number of students enrolled in small rural schools with numerous older teachers and low student-teacher ratios. Once they strengthen their skills and after two years of their first assignment, teachers tend to shift to schools closer to large urban centres, especially Bangkok. The high turnover of teachers and directors in less-desirable areas affects education quality, FEP efficiency and results.

• The FEP impacts would be greater if the subsidies were larger and better targeted toward needy schools and students. The current subsidies are relatively important in terms of overall school resources, in particular for secondary schools, where they represent 18 per cent of total resources. But the current allocation rule with ceilings does not support fairness overall. The degree of poverty incidence is not uniformly distributed across schools because many schools, especially in rural areas, experience higher-than-average poverty levels. To overcome problems related to the distribution of resources and to better target poor students, the Policy and Planning Division may need better information about the poverty level in each school, which does not exist at the moment. It may also need to increase the budget allocation for the poor student subsidy by removing or at least increasing the budget thresholds. Another problem is that the programme only targets poor students enrolled in schools instead of targeting all poor households to ensure school enrolment and attendance.

• Removing the current ceiling on the poor student subsidy would help reduce the relative inequalities in resources among Thai schools. The effect would be more significant among secondary schools. If the FEP poor student subsidy was allocated without the current student threshold to all reported poor students enrolled in schools, it would represent an extra per- student transfer of 1,437 baht per primary school student and 2,147 baht per secondary school student. Given the 3.7 million reported poor students in Thailand’s public school system in 2014, removing this budget constraint would represent an extra budget requirement of 5.9 billion baht to the public treasury.

• The FEP programme encompasses policy objectives of universal quality education with equity promotion and poverty reduction. The allocation system is unusual because the ultimate cash recipients for several of the subsidy components are households, although all funds transit through schools. Through its various subsidy transfers, the FEP pursues the objectives of education quality and access for all (horizontal equity) while increasing access and education enrolment for disadvantaged groups through income redistribution (vertical equity). The FEP has adopted an unconventional approach to its redistribution objective through subsidy transfers to schools, which are then to be allocated to parents.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 89 5. Concluding remarks and recommendations

Such an indirect approach of subsidy transfers to households, which gives schools the responsibility of managing and monitoring the funds, could potentially reflect a distrust of parents’ decisions and choices for their children’s education.

• Given that one of the main objectives of the programme is the transfer of funds to poor households to relieve their budget constraints, it would be preferable to allocate funding directly to households. Despite the fungibility of funds in a household budget, it is better from an individual welfare perspective to provide financial instead of in-kind transfers to households to allow spending adjustments to their preference. This would call for a system that would seek vertical equity through direct targeting and allocation of subsidies to poorer households and needy students.

• Current limited households’ knowledge about the availability of the poor student subsidy affects transparency and local accountability and reduces potential impact on education enrolment and retention. Providing information to the community about the poor student subsidy cash transfer and encouraging and formalizing participation could help promote education and increase the enrolment rate among poor households. Students from poor families tend to be the first to drop out of school or choose not to enrol. If households could see the increased benefits of sending their children to school, they might more likely choose to enrol them. Although it is difficult to anticipate what incentives would change a household’s perspective and if it would be sufficient to outweigh the cost of sending children to school, parents’ awareness of such opportunities as the FEB is crucial to their decision- making. Raising awareness about the benefits and eligibility is hence crucial to increase the potential FEP impacts.

5.2 Recommendations

FEP design and central-level management issues

Improve vertical equity and efficiency.

Explore (within the Ministry of Education) possibilities of implementing a direct cash transfer programme to poor households, using poverty definition guidelines, to improve the targeting of the poor student subsidy and vertical equity. To overcome problems related to the distribution of resources and targeting to poor households, the Policy and Planning Division likely will need better information about the poverty levels in each school.

Remove or increase the budget allocation for the poor student subsidy by removing or at least increasing the budget thresholds. The current ceilings in the poor subsidy transfers, based on number of enrolled students at the school level, should be lifted to increase vertical equity.

Improve equity of the FEP allocation. The Ministry of Education should provide supplementary funding to (i) schools located in disadvantaged areas facing limited autonomous revenue from the community and (ii) schools with special needs students and/or in schools’ need for additional core curriculum activities and special learning programmes.

90 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 5. Concluding remarks and recommendations

Integrate student data lists across the three school systems. This should be a priority to allow verification of students and proper accounting of student enrolment in order to reduce the possibilities of ghost students, overfinancing in the FEP programme and potential leakage of funds. A verification of fictitious students should be done through the verification of the number of students reported in school exams and national examinations, in comparison with the reported number of enrolled students in school records and with the allocated FEP funds.

Make single FEP programme transfers to schools. The OBEC Treasury should stop transferring the various budget allocations in bulk to schools. Detailed information should accompany each fund transfer to facilitate assignment of the FEP funds among the subsidy categories at the school level to reduce the potential reallocation of funds.

Promote increased competition in book procurements. By enhancing the competition in the book procurement market at the national and regional levels, book delays and costs could be reduced. The current requirement of book procurements from an accredited book list should be reconsidered.

Programme implementation issues at the central government and school levels

Improve poverty screening at the school level.

Revise the practices of poverty screening at the school level because they lack monitoring of operations and rigorous evaluation to ensure effectiveness of the FEP as intended. Clear guidelines for determining eligible poor children should be a formalized part of the programme. A better information system should be developed to identify the needy students and schools (those with greater poverty status).

Improve resource flows.

Improve the budgetary preparation system and introduce specific timelines for the budget management of the various subsidies at the central government level. Specific timelines should be prescribed in the FEP guidelines at the central OBEC level and the Policy and Planning Division for the subsidy transfers to schools to allow the timely availability of resources.

Improve guidelines and introduce timelines for FEP implementation at the school level. FEP guidelines are important for schools to properly manage the FEP funds. It is also important for schools to access official guideline information early, either through electronic or paper-based forms, once funds are transferred.

Improve the accounting system at the school level as well as schools’ financial capacity and the reporting mechanism. Efficient and standardized bookkeeping and a system for information transmission from schools to the higher administrative levels should be put in place, with integration with the Data Management Centre, system to allow for the tracking and reporting of funds received and used.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 91 5. Concluding remarks and recommendations

Introduce guidelines for fund use at the school level and provide training on subsidy use to school administrators to reduce rule interpretations and variance among schools in the provision of subsidies to beneficiaries.

Introduce guidelines and criteria for use of unspent FEP funds at the school level to reduce the moral hazards and uneven discretion by school directors.

Other governance and cross-cutting issues

Improve information and accountability.

Enhance the ESAO supervising role and accountability. Currently, the ESAOs fulfil a limited part of their responsibilities in overseeing, monitoring and supervising the FEP. The ESAOs should emphasize verification of school receipt of FEP funding and monitor FEP spending. To do this, the ESAOs should be given sufficient resources, including trained monitoring and evaluation personnel.

Enhance the transparency of subsidy transfers to households. Receipt of cash transfers to households and school records of subsidy transfers should be enforced at the school level.

Enhance transparency and information to households about the FEP. Improve the dissemination of information to households, including programme objectives and recipients’ obligations and subsidy eligibility, in particular in relation to the poor student subsidy. The better provision of information to households about the programme and subsidy objectives and their obligation should contribute to improving programme outcomes.

Enhance accountability at the school level. Along with increased autonomy of budget and personnel management, public schools should be held more accountable for their education outputs and outcomes. Disclosure of budgetary and student performance information to local communities and parents could hold schools and teachers accountable for their performance.

Introduce an annual report on FEP activities, use of the subsidies and results at the school level. An annual report may contribute to increased accountability, transparency and education quality.

Enhance public participation. Raising public participation and awareness could enhance knowledge among households and effectiveness of the programme.

Improve teacher allocation mechanisms and reduce teacher absenteeism.

Enhance teacher management and deployment. Poor aggregate results of student performance are a hotly debated policy topic. In addition to efficiency of FEP resource use, education quality is also affected by various other factors, in particular teaching quality. The distribution of teachers across locations is the responsibility of the central ministry. Small primary schools in rural and remote areas are understaffed and have low teacher retention, both of which affect the quality of the learning experience. Improving incentives and mechanisms to rebalance the distribution of teachers across the country is necessary to improve learning quality.

92 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 5. Concluding remarks and recommendations

Reduce teacher absenteeism and improve staff incentives. Reducing teacher absenteeism is fundamental to increasing teaching time and thus improving education outcomes. A way to reduce absenteeism is to link pecuniary and non-pecuniary incentives as well as relocation options with attendance. Procedures should be put in place to reduce the FEP administrative time required of teachers, especially in heavy-poverty areas.

5.3 The way forward

Based on the PETS assessment of the FEP resources and access in Thailand, there are several next steps that could be taken to better measure quality and assess school performance, beginning with further research to fill the knowledge gap on issues of efficiency and equity in education in Thailand, such as: • Overall assessment of the FEP, using a PETS on the three parallel primary and secondary school systems (under the jurisdiction of the OBEC, the Local Administration Organizations and the Office of the Private Education Commission) to assess equity and efficiency issues between sectors, compare school quality and student performance and develop best practice learning.

• Development of alternative ways to identify eligible beneficiaries for the poor student subsidy and to transfer the subsidies to poor households.

• Impact evaluation study of the method now in place for targeting poor households for the student subsidy scheme to assess the effectiveness of the cash transfer programme.

• Assessment of education quality, school use of resources and accountability using a Quantitative Service Delivery Survey or in line with the Service Delivery Indicator framework.

• Analysis of factors explaining teachers’ absenteeism and the impacts on education quality.

• Analysis of classroom management and time on task. Improve education quality by understanding teachers’ time allocation in school and classrooms.

• Analysis of small schools’ efficiency, equity and quality and determine incentives and advantages of consolidation at the school and community levels.

5.4 Lessons learned

The first PETS on education in Thailand has been informative, with a few lessons that should be useful for future use of this type of survey.

Lesson 1. Timing and personnel make a difference when collecting data through school and household surveys. Data collection should be conducted during regular operating periods. Our experience indicates the ideal timing for surveys is at the beginning of semesters, when schools and teachers are not busy with other major tasks. The activities of most secondary schools were found to have reduced during the last month of the second semester, after students had taken the national tests. The timing of the survey could affect data quality. For instance, teacher absenteeism may not

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 93 5. Concluding remarks and recommendations

be evenly spread throughout the school year and could be substantially higher during the last quarter of the fiscal cycle.

Generally, school and household surveys require different skill sets from enumerators and should ideally be conducted by separate teams of enumerators. For instance, collecting financial information from schools requires enumerators who are familiar with financial data in order to detect inconsistencies or misreporting of data. School officials may not always reveal true information about school revenue and expenditures. Despite the use of district officers familiar with school operations for the PETS, data validation and cleaning was a lengthy process, and problems were exacerbated by the deficient bookkeeping standards at the school level. But the district officers were not ideally suited for the household interviews. In the future, it would be ideal to hire local enumerators to conduct the household visits.

Lesson 2. Expect bookkeeping challenges. Various data quality problems were uncovered following data collection. School recordkeeping of FEP receipts and the disbursement of subsidies was especially problematic. We addressed this shortcoming by referring to the central level records of the budgetary allocation to schools from the Comptroller General’s Department (which are managed electronically and available online).

It is also important to acknowledge the fungibility of funds when schools report their spending and to bear in mind that without going through a detailed audit (which the PETS is not), the verification of financial data cannot be fully complete.

Lesson 3. Additional questions of interest cannot be answered without additional time, effort and resources. Appropriate time and resources are needed to conduct a complete PETS-QSDS. The initial scope of the PETS was expanded because the study design progressed to cover various issues relating to education quality and hence more in the realm of a Quantitative Service Delivery Survey. The added issues included teacher absenteeism, household receipt and use of the subsidy transfers, governance and accountability. In particular, the household survey was added to allow for the tracking of the flow of resources to the ultimate beneficiaries. This required more time and resources than initially planned. However, the funding was not adjusted. For instance, the requirement for district enumerators to conduct repeated household visits, often in remote areas, was not adequately compensated. Many interviews required several home visits in the evenings, while urban households were found to be less cooperative.

94 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand References

Bold, T., B. Gauthier, J. Svensson and W. Wane, ‘Delivering Service Indicators in Education and Health in Africa: A proposal’, in Policy Research Working Paper Series # 5327, The World Bank, Washington D.C, June 2010.

Bureau of the Budget, ‘Government of Thailand Budget in Brief’, Government of Thailand, Bangkok, various years.

Chaudhury, N., J. Hammer, M. Kremer, K. Muralidharan and H. Rogers, ‘Missing in Action: Teacher and health worker absence in developing countries’, in Journal of Economic Perspectives, vol. 20, no. 1, 2006, pp. 91–116.

Das, J., Dercon, S., Habyarimana, J. and P. Krishnan, ‘When Can School Inputs Improve Test Scores’, in Policy Research Working Paper 3217, The World Bank, Washington, D.C., 2004.

Gauthier, B and Z. Hamed, Public Expenditure Tracking Survey (PETS) and Quantitative Service Delivery Survey (QSDS) Guidebook, The World Bank, Washington, D.C., 2012.

Ministry of Education, ‘Implementation Guidelines for the 15-Year Free Education Policy with Quality’, Government of Thailand, Bangkok, 2009.

Policy and Planning Division, ‘Educational Statistics 2012’, Office of the Basic Education Commission, Government of Thailand, Bangkok, 2012.

Policy and Planning Division, ‘Operational Guidelines for the 15-year Free Education Programme’, Office of the Basic Education Commission, Government of Thailand, Bangkok, various years.

Hanushek, E.A., ‘Education Production Functions: Evidence from developing countries’, in Economics of Education, edited by D.J. Brewer and P.J. McEwan, Elsevier, Philadelphia, 2010, p. 132–136.

Punyasavatsut, C., ‘Thailand: Issues in education’, in Education in South-East Asia, edited by L. Pe Simaco, Bloomsbury, London, 2013.

Rothstein, R., ‘Family Environment in the Production of Schooling’, in Economics of Education, edited by D.J. Brewer and P.J. McEwan, Elsevier, Philadelphia, 2012, p. 148–155.

Stark, O., J. E. Taylor and S. Yitzhaki, ‘Remittances and inequality’, in Economic Journal, vol. 96, 1986, pp. 722–740.

Tran Ringrose, H.P. and S. Schaeffer, Education Review and Recommendations, UNICEF Thailand, Bangkok, 2014.

United Nations Educational, Scientific and Cultural Organization Bangkok,Implementing Medium- term Expenditure Frameworks: Thailand, education financial planning inAsia , Bangkok, 2009.

United Nations Educational, Scientific and Cultural Organization Bangkok, ‘UNESCO National Education Support Strategy Kingdom of Thailand 2010–2015’, Asia and Pacific Regional Bureau for Education, Bangkok, 2011.

World Bank, Thailand Public Expenditure Review, Bangkok, 2012.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 95 © UNICEF Thailand/2013/Metee Thuentap

© UNICEF Thailand/2007/ M.Thomas Appendix I Survey methodology

A. Research questions The PETS addressed various research questions, such as: • Budget execution and funding levels o Are there delays in transferring and receiving subsidies at the school and household levels? o Do the subsidies allocated and received by schools and households correspond to the FEP prescribed amounts and guidelines for the various types of schools and households? o What are the levels of subsidy reaching children, and are subsidies sufficient to cover basic education costs for households and reduce the financial burden for poorer families?

• Efficiency, effectiveness and equity of public expenditure o Are schools facing shortages of resources, in particular of school materials or books, as part of the programme and overall, given available resources? o How are subsidies used at the school and household levels, and does that use correspond to the programme’s rules and guidelines? o Are there inequities in resources available at the school level? Are there inequities and inefficiencies in resource allocation at the school level and links with education outcomes? o Has the 15-year Free Education Programme reached its intended objectives and to what extent has the programme reduced financial constraints to households and levelled the playing field regarding access to basic education? • Incentives and behaviour of service providers o What are the characteristics of personnel and incentives to provide quality education over time? o Is staff absenteeism affecting school services and quality?

A few hypotheses were examined for explaining the performance of the programme and education results, such as: There are inefficiencies in the programme rules or implementation process (differences in implementation across schools or regions, insufficient subsidy rates) as well as the presence of other factors or constraints affecting accessibility and performance that are not addressed by the programme (inequity in teacher allocation, school characteristics, parents’ characteristics, etc.).

B. Survey instruments The survey instruments were first discussed with OBEC representatives and other stakeholders on 13–14 November 2014. A pre-test of the instruments was then conducted among ten schools in six provinces during 17–21 November. Various categories of schools were visited in urban and rural areas: primary, secondary and special schools. The test of the questionnaire allowed verifying, revising and completing the proposed instruments for collecting the required information. Following the pre- test of the instruments, further discussions with OBEC representatives were conducted on 27–30 November to refine and finalize the various questionnaires.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 97 Appendix

In addition to the data to be collected at the central level on the budget planning process and fund release to the programme, the survey instruments comprised fives modules: 1. school questionnaire 2. teacher questionnaire 3. absenteeism questionnaire 4. household questionnaire 5. district administration questionnaire.

The first module is a school facility questionnaire that was administered to the school director or head of the facility. The module concerns school characteristics, infrastructure and inputs, receipt of resources through the 15-year FEP and other sources, school expenditures (including transfers to households), governance and supervision, and perceived problems in the programme and at the school level.

Module 2 is a teacher module administered to 12 teachers in each school, including the school director, to collect data on teachers’ characteristics. Teachers are to be randomly selected using each school’s roster. The survey collected data, such as types of teachers, experience, education levels, salaries, training, satisfaction and mobility.

Module 3 is an absenteeism module used to calculate the absence rate among teachers. To calculate absenteeism, a list of teachers in each school was made (Module 1 and 2). This was followed by an unannounced (second) visit to each school (on a day and time when the school is in session) to verify the presence of the 12 teachers in the random sample for Module 2.

Module 4 is a household survey that was administered to 10 parents chosen randomly within the student body to collect data on parents’ characteristics and receipt and use of the FEP subsidies. The module comprises questions on household characteristics, income, received FEP transfers, use of the funds and satisfaction with the programme.

Module 5 is a district administration questionnaire that was administered to the district education head. It comprises data on district characteristics, budget, expenditures and supervision activities. In addition, information was collected from the OBEC central administration regarding the planning and execution of the FEP budget.

C. Sampling strategy The survey sample frame in each province was based on the list of public schools under OBEC’s responsibility provided by the provincial authorities. The survey sample encompassed 250 schools from a population of 30,600 pre-primary, primary, lower secondary and upper secondary schools as well as special schools and boarding schools within the public system in Thailand. The sample covered 24 ESAs. Nineteen primary EASs were randomly selected among 183 primary ESAs, and 5 secondary ESAs were randomly selected among 42 secondary ESAs. Some primary ESAs were purposely selected to cover schools in border areas. Selected ESAs represent 10 per cent of the ESA population, covering all regions in Thailand as follows.

98 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand Appendix

Northern 1. Chiang Mai Primary Educational Service Area Office 1 2. Chiang Rai Primary Educational Service Area Office 1 3. Chiang Rai Primary Educational Service Area Office 4 4. Phayao Primary Educational Service Area Office 1 5. Phayao Primary Educational Service Area Office 2 6. Phitsanulok Primary Educational Service Area Office 1 7. Secondary Educational Service Area Office 39 (Phitsanulok, Uttaradit) Central 8. Nakhon Pathom Primary Educational Service Area Office 1 9. Lopburi Primary Educational Service Area Office 1 10. Chanthaburi Primary Educational Service Area Office 1 11. Rayong Primary Educational Service Area Office 1 12. Sa Kaeo Primary Educational Service Area Office 2 13. Secondary Educational Service Area Office 1 (Bangkok) 14. Secondary Educational Service Area Office 10 (Phetchaburi, Prachuap Khiri Khan, Samut Sakhon, Samut Songkhram) North-eastern 15. Nong Khai Primary Educational Service Area Office 1 16. Kalasin Primary Educational Service Area Office 2 17. Ubon Ratchathani Primary Educational Service Area Office 3 18. Nakhon Ratchasima Primary Educational Service Area Office 7 19. Secondary Educational Service Area Office 20 (Udon Thani) Southern 20. Phatthalung Primary Educational Service Area Office 1 21. Trang Primary Educational Service Area Office 2 22. Surat Thani Primary Educational Service Area Office 3 23. Phuket Primary Educational Service Area Office 24. Secondary Educational Service Area Office 14 (Phang Nga, Phuket and Ranong)

As for the special and welfare schools in the sample, 10 of them were randomly selected from each region as follows: Northern: two special schools and one welfare school Central: one special school and one welfare school North-eastern: two special schools and one welfare school Southern: one special school and one welfare school

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 99 Appendix

Figure A1: Provinces in the survey sample, by geographical region

Northern CHM—Chiang Mai CHR—Chiang Rai PY—Phayao PNL—Phitsanulok UTD—Uttaradit Central NP—Nakhon Pathom LB—Lopburi JB—Chanthaburi RY—Rayong SAK—Sa Kaeo BK—Bangkok PKK—Prachuap Khiri Khan PB—Phetchaburi SKN—Samut Sakhon SKM—Samut Songkhram North-eastern NK—Nong Khai KS—Kalasin UB—Ubon Ratchathani NR—Nakhon Ratchasima UD—Udon Thani Southern PL—Phatthalung TR—Trang STH—Surat Thani PK—Phuket PHG—Phang Nga

F. Field deployment strategy (i) Data collection team A team from OBEC comprising 50 enumerators collected the data. Five enumerators from five regions with field and research experience were selected as supervisors to oversee the enumerators working in the same region. These supervisors also worked as contact points with the Thammasat research team.

While it is generally recommended to hire a private sector expert independent from the sector or programme examined in order to ensure independence of the enumerators and objectivity of the data collected (Gauthier and Ahmed (2012, p. 39), data collection was handled by the enumerators from the OBEC team. The benefits of making use of agents well aware of the programme structure and used to conducting surveys outweighed the potential problems of objectivity. Measures were taken to ensure reduction in potential conflict of interest, including random verification of data collected through central team visits to schools and households.

100 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand Appendix

In each sample ESA, two enumerators were responsible for data collection from 10 schools and 100 households. Information about household location and student names were provided by schools during each enumerator’s first school visit. Enumerators randomly selected households located about less than 45 minutes of communication from each school. Each enumerator visited each school and its nearby households two to four times during the three-month period of the survey to complete the data collection. Enumerators’ responsibility included administering the survey modules, including the district administration questionnaire, teacher questionnaire and teacher absenteeism module. At least 12 teachers were chosen randomly from the teacher roster during the first school visit. While the other modules were administered during announced visits, the teacher absenteeism questionnaire was administered through an unannounced school visit to measure potential absence from schools and classrooms. During the field survey periods, supervisors worked as a contact point for other enumerators within the same regions. Survey progression and field-related problems were monitored and administered by the Thammasat research team.

In addition, various protocols were used to support data collection and verification work by the enumerators and supervisors. In particular, prior to school visits, administrative data from sample schools (such as student enrolment and school background data) were retrieved from the central school database and incorporated into the survey module for data verification and to facilitate the school module implementation during the field work. A five-day training session for the enumerators and supervisors took place before the launch of the survey. Training included school and household field visits. During the survey process, household visits were conducted after the school visits to ensure coherence between school and household data and to reduce potential household misreporting due to poor recollection. All enumerators’ reports were then verified by the Thammasat research team. Finally, the Thammasat research team conducted random field spot checks of school and household questionnaires to verify the data reported by the enumerators.

(ii) Period covered and survey timing The field work of the survey took place between January 2015 and April 2015, during the school year’s second semester. The collected data covered one fiscal year (FY 2013/14), which runs from 1 October 2013 to 30 September 2014. During FY 2013/14, data collection covered the last semester of the 2013/14 school year and the first semester of the 2014/15 school year. Given that FEP subsidies are allocated within each academic semester, the timing and targeted data allowed the researchers to properly track transfers for FY 2013/14.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 101 Appendix II Basic statistics of survey data

Table A1: Basic statistics of the PETS findings

Primary Secondary Total Key Number of schools surveyed 190 50 240 Number of small schools 91 19 110 Number of boarding schools 7 5 12 Average number of students 248.9 1,105.2 455.8 Percentage of poor student 29.2% 16.0% 26.4% Percentage of foreign students 5.5% 0.2% 4.4% Average number of teachers 17.2 62.7 26.6 Average number of staff members 3.5 8.6 4.6 Average years of directors’ experience 14.5 11.6 13.9 Average number of ESAO general visits 4.4 2.8 4.1 Average number of ESAO supervision visits 3.0 2.6 2.9 Average number of ESAO internal audit visits 0.6 1.0 0.7 Percentage of teachers absent from school 8.8% 5.0% 8.0% Average parents’ contribution in school fees (baht) 1,627 7,361 2,821 Distant from school Average distance to the closest hospital (km) 6.9 8.9 7.3 Average time to the closest hospital (minutes) 13.1 13.1 13.1 Average distant to ESAO (km) 24.6 71.1 32.3 Average time to ESAO (minutes) 34.5 71.6 42.2 Electricity and IT device Electricity access 99.5% 100.0% 99.6% Have electricity problem 25.8% 46.0% 30.4% Average number of computers 21.4 106.3 39.1 Average number of computers per student 0.1 0.1 0.1 Average number of tablets 60.1 127.4 74.1 Average number of tablets per student 0.20 0.11 0.18 Internet access 97.4% 98.0% 97.5% Good State-provided internet access 58.4% 58.0% 58.3% Water and toilet Have drinking water problem 52.1% 44.0% 50.4% Average number of water filter machines per 1.3 2.3 1.5 school Average number of total toilets 14.8 32.8 18.6 Average number of toilets per student 0.08 0.04 0.07 Average number of girl toilets 7.6 20.1 10.2 Average number of girl toilets per student 0.0 0.0 0.0 Percentage of girl toilets in school 50.6% 60.9% 52.8% Students

102 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand Appendix

Primary Secondary Total Percentage of registered foreign students 3.2% 0.1% 2.6% Percentage of unregistered foreign students 2.2% 0.1% 1.8% Percentage of foreign students 5.5% 0.2% 4.4% Books Have newspaper for students 67.9% 92.0% 72.9% Average number of total books in library 2,980 16,913 5,883 Average number of newly purchased books to 111 1,907 485 library Average number of donated books to library 115 1,296 361 Average number of new books to library 226.5 3202.4 846.5 Room & class Average number of classrooms 12.7 30.0 16.5 Average number of classrooms per student 0.1 0.0 0.1 Average number of language operation rooms 0.3 1.3 0.5 Average number of computer operation rooms 1.2 2.5 1.4 Average number of science operation rooms 0.8 4.7 1.6 Average number of other operation rooms 1.3 6.1 2.3 Pre-primary class size 16.4 - 16.4 Primary class size 18.0 - 18.0 Secondary class size - 33.1 33.1 Teacher Average number of total teachers 17.2 62.7 26.6 Average student-teacher ratio 14.2 16.2 14.6 Average number of total staff members 3.5 8.6 4.6 Average number of teachers in government 0.1 0.6 0.2 mission Average number of retired teachers 0.4 1.9 0.8 Average number of teachers who leave school 0.3 1.7 0.6 Percentage of teachers absent from school 8.8% 5.0% 8.0% School directors Average experience in this school 6.1 2.2 5.3 Average experience in school director’s position 14.1 11.6 13.9 Average total years of experience in civil service 30.4 31.8 30.7 Education service area office (ESAO) Average administrative budget 5,483,118 5,122,320 5,407,952 Average developmental budget 3,000,000 3,000,000 3,000,000

Source: Thailand PETS, 2014.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 103 Appendix III Information delays

Table A2: Delay in the information flow on budget transfers from Policy and Planning Division to ESAOs and schools (numbers of days), by ESA a. Step 1 (second semester of the 2013/14 school year) Poor student Boarding Educational service area 70% 30% subsidy student subsidy Chiang Mai 1 31 21 42 10 Chiang Rai 1 3 37 15 10 Chiang Rai 4 3 22 31 4 Phayao 1 4 51 51 - Phayao 2 44 16 15 18 Phitsanulok 1 8 29 1 - Nakhon Pathom 1 7 22 22 9 Lopburi 1 8 22 51 - Chanthaburi 1 2 18 15 - Rayong 1 25 15 15 - Sa Kaeo 2 3 15 15 - Nong Khai 1 4 43 43 - Kalasin 2 3 18 18 - Ubon Ratchathani 3 8 16 16 - Nakhon Ratchasima 7 8 31 31 - Phatthalung 1 4 17 21 - Trang 2 4 22 23 - Surat Thani 3 3 44 16 - Phuket 3 22 22 - 39 (Phitsanulok, Uttaradit) 3 17 15 71 1 (Bangkok) 3 15 14 - 10 (Phetchaburi and other,) 3 15 15 8 20 (Udon Thani) 2 21 18 11 14 (Phang Nga, Phuket, 43 31 14 - Ranong) Total 9.54 24.17 22.33 15.36

104 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand Appendix

b. Step 2 (first semester of the 2014/15 school year) Poor student Boarding Educational service area 70% 30% subsidy student subsidy Chiang Mai 1 25 22 22 54 Chiang Rai 1 27 17 17 22 Chiang Rai 4 32 8 8 25 Phayao 1 34 20 0 - Phayao 2 26 14 14 25 Phitsanulok 1 36 9 9 - Nakhon Pathom 1 26 7 7 36 Lopburi 1 34 8 8 - Chanthaburi 1 25 8 8 - Rayong 1 21 8 8 - Sa Kaeo 2 34 9 9 - Nong Khai 1 33 8 8 - Kalasin 2 29 8 7 - Ubon Ratchathani 3 33 8 8 - Nakhon Ratchasima 7 26 15 15 - Phatthalung 1 26 20 20 - Trang 2 5 20 20 - Surat Thani 3 27 9 9 - Phuket 21 7 7 - 39 (Phitsanulok, Uttaradit) 29 7 7 22 1 (Bangkok) 33 14 20 - 10 (Phetchaburi and other 22 9 9 19 provinces) 20 (Udon Thani) 33 17 17 27 14 (Phang Nga, Phuket, 29 9 9 - Ranong) Total 27.25 11.71 11.08 26.64

Source: Thailand PETS Survey, 2014.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 105 Appendix IV Special and welfare schools under the Bureau of Special Education Administration

The Bureau of Special Education Administration (BSEA) under the OBEC is responsible for the education provision for children with disabilities and disadvantaged groups. Under Section 10 of the National Education Act, 1999 (with an amendment in 2010), the Government is to provide equal rights and opportunities for Thai citizens to receive 12 years of quality education free of charge. Section 10 includes children with physical, mental and learning deficiencies and those with disadvantages.

In 2014, there were about 40,000 students in 51 welfare schools and 20,000 students in 44 special schools and 77 centres. Both welfare and special schools only operated in some provinces due to uneven distribution of these across provinces.

The PETS samples consisted of three welfare schools and seven special schools, drawn from all regions. Centres for special students that provide non-formal services to all people with disabilities, both children and adults were not included. Characteristics of the school samples are shown in Table A3.

In FY 2013/14, the BSEA received an FEP budget of 1,466 million baht (see Table A2) and other programme budgets totalling 5,676 million baht. Subsidy rates for the FEP programme were much higher than those for general public schools. Top-up subsidies for boarding students was about three times higher than day students (see Table A5). The budget allocation, release and spending of the FEP under the BSEA were analysed using the same structure described in chapter 4.

1. FEP budget process The BSEA allocated budget to their schools only four times a year, once in step 1 (second semester of the 2013/14 school year) and three times in step 2 (first semester of the 2014/15 school year). In step 1, the BSEA used the actual number of enrolled students for budget allocation to schools. In step 2, the BSEA used three sets of information to allocate its budget: The first was based on the student flow, the second was based on new enrolment, and the third was based on the adjustment of student flow.

Delays in the budget process at the central level were found to be quite small—up to a maximum of nine days (see Table A6). Budget transfer for schools under the BSEA did not involve the ESAOs because these schools can function as budgetary units.

The OBEC Treasury needed about 20 days to process budget petitions. After information validation, schools received the fund transfers in about 9 days maximum (see Table A7).

Table A8 shows the budget execution rate under the BSEA for FY 2013/14. About 6 per cent of the FEP subsidies, or 87 million baht, remained at the BSEA. Relative large remaining portions of the budget were the subsidies for student development activities and learning materials. In practice, these remaining budgets were re-categorized to capital categories and were spent mostly on building repairs and building construction. Budget discretion was made by the BSEA.

106 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand Appendix

2. School management of FEP subsidies Differences were found between the BSEA allocation and school receipt of the FEP money. About two-thirds of the sampled 10 schools reported such mismatch (see Table A9). Such errors could be partly human errors and poor bookkeeping. As with the OBEC schools, the allocated budget data was used to verify budget use and other issues in subsequent analyses.

Table A10 shows the average per-student subsidies of the welfare and special schools in the sample and shares of each subsidy. About 90 per cent of the total was allocated for the basic and top-up learning and teaching subsidies, followed by books, at 3 per cent, student development activities, at 3 per cent, uniforms, at 2 per cent, and learning materials, at 2 per cent.

Table A11 shows the share of actual spending of each subsidy by school. Both the welfare and special schools spent about 90 per cent of their FEP transfer on learning and teaching activities, followed by 3 per cent on books, 2 per cent on uniforms, 2 per cent on learning materials and 3 per cent on student development activities.

Table A12 shows, for each subsidy category, the percentage of FEP resources spent by schools in proportion of their received funding. Special schools overspent on all items, at an average of 7 per cent, while welfare schools underspent, at about 10 per cent on average.

Table A13 shows the unspent FEP budget at the school level in FY 2013/14 and FY 2014/15. Despite overspending their received FEP budget, special schools retained unused funds, at about 20 per cent. Similarly, welfare schools, although underspending their FEP budget, retained unused funds, at about 27 per cent.

Basic subsidy for learning and teaching activities Specific expenditure of these funds by category of school activities (see Table A14) revealed that about 80 per cent was used to support school learning and teaching, followed by 13 per cent on general management, 7 per cent on capital expenses and 2 per cent personal management.

Books Welfare schools used the same book list approved by OBEC. Problems schools faced were found to be similar to the general public schools. Book delays were found to be related to one state-owned publishing company. Welfare schools provided on average 10 books per student at the primary school level and 13 books at the secondary school level. Special schools faced additional problems in book procurement because many books must be customized to specific disabilities.

Learning materials Welfare school use of the learning materials subsidy was slightly lower than the budget allocation, while the special schools spent about 60 per cent more than the allocated amount (see Table A15a). About one third of the welfare schools chose to allocate the material in cash. Also, about half of the special schools choose to allocate the material in-kind where most parents live far away from the school (see Table 15b). Delays in subsidy transfer to parents were less than a week in step 1, which relied on the actual number of enrolled students, while no delay was found in step 2. For the welfare schools, information about household receipt of learning materials was incomplete because most of them could not recall the amount of transfer received

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 107 Appendix

Student uniforms Both the special and welfare schools overspent on the uniform subsidy by about 30 per cent (see Table A16). Still, households had to pay additional money for their children’s uniforms, particularly for special needs children. Similarly to the pattern of the learning materials subsidy transfer to households, about one third of the welfare schools choose to provide the uniform subsidy in cash, while about 60 per cent of the special schools provided it in cash. Household receipt of the uniform subsidy was found to be consistent with the school modalities (see Table A16).

Student development activities About 10 per cent of the welfare and special schools could not provide all four activities during the academic year, particularly for students with learning difficulties. Yet, no school imposed any additional fee from parents to support these activities (see Table A17).

3. School management of FEP top-up subsidies Both special and welfare schools received full coverage of the FEP top-up subsidies, based on their enrolled students. Top-up subsidies for the welfare and special schools, which are larger than what the general public schools receive, reflect additional school expenses and meal programmes but no subsidy for poor students. These subsidies were different for boarding and day schools and varied by grade level. The subsidy for boarding students was about three times larger than for day students, indicating the additional costs for breakfasts and dinners. The additional subsidy for a milk programme came from local government authorities. The survey found that schools received the milk before the semester began.

4. Overall resources available at the school level. Table A18 presents total resources per students that reached each school. Both the welfare and special schools did not collect extra fees from parents, while contributions from local and private donations accounted for 4 per cent of special school resources. Welfare schools received relatively less support from local and private sources.

Table A3: Main characteristics of school sample under the Bureau of Special Education Administration

Characteristics Welfare schools Special schools Number of schools 3 7 Average number of students 901 304 Boarding school 748 296 Day school 153 7 Average number of teachers 26 30 Average number of classroom 26 34 Director’s experience (years) 10.7 14.9 Average budget (millions) 69.2 28.9

Source: Bureau of Special Education Administration Operation Plan, 2014.

108 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand Appendix

Table A4: Budget of the Bureau of Special Education Administration, FY 2014/15

Budget by spending categories Plan Capital Total Salaries Operating Subsidies Others expenses 1. Basic education provision plan FEP 1,466,323,600 0 0 0 1,466,323,600 0 1. Basic learning 1,310,096,100 0 0 0 1,310,096,100 0 and teaching 2. Books 53,328,600 0 0 0 53,328,600 0 3. Learning 26,016,200 0 0 0 26,016,200 0 materials 4. Uniforms 27,852,400 0 0 0 27,852,400 0 5. Student development 49,030,300 0 0 0 49,030,300 0 activities 2. Educational quality and opportunity enhancing plans 1. Disabled 2,376,248,800 1,121,513,500 775,076,700 180,582,600 297,076,000 2,000,000 2.Disadvantaged 1,312,064,000 894,202,000 193,342,200 224,519,800 0 0 3. Teacher 1,838,289,600 - 1,838,289,600 - - - Substitutes 4. Revolving fund for 150,000,000 - - - - 150,000,000 disabled

Source: Bureau of Special Education Administration Operation Plan, 2014.

Table A5: FEP subsidy rates for special and welfare schools, FY 2013/14 a. Welfare schools: Basic learning and teaching (baht/student/year) Top-up for boarding Level Basic subsidy Top-up for day school students Pre-primary 1,700 24,000 7,220 Primary 1,900 24,400 7,220 Lower secondary 3,500 24,200 6,600 Upper Secondary 3,800 24,200 6,600 b. Special schools: Basic learning and teaching (baht/student/year) Top-up for boarding Level Basic subsidy Top-up for day school students Pre-primary 1,700 24,820 7,220 Primary 1,900 24,820 7,220 Lower secondary 3,500 24,600 7,000 Upper secondary 3,800 24,200 7,000

Source: Bureau of Special Education Administration, 2014.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 109 Appendix

Table A6: Delay in budget petition by Bureau of Special Education Administration

Step 1 Step 2 (semester 2 of 2013/14 school year) (semester 1 of 2014/15 school year) Type of subsidy Duration Duration Starting date Starting date (days) (days) Based on actual students (basic + learning materials+ 10 Oct. 8.6 - - student development activities) Based on student flows - - 13 Mar. 3.9 (all FEP) Based on new enrolment - - 27 Jun. 2.2 (all FEP) Based on adjusted - - 27 Jun. 1.4 numbers (all FEP)

Source: Thailand PETS, 2014.

Table A7. Delay of school receipt of FEP resources

Step 1 Step 2 (semester 2 of 2013/14 school year) (semester 2 of 2014/15 school year) Date: BSEA Date Date BSEA Date Activity petition Treasury Delay (days) petition Treasury Delay (days) made to transfer school made to transfer school OBEC requested received OBEC requested received Treasury budget Treasury budget Based on actual students (basic + learning 11 Oct. 30 Oct. 9 - - - materials+student development activities) Based on student flows (all - - - 14 Mar. 26 Mar. 8.2 FEP) Based on new enrolment (all - - - 30 Jun. 8 Jul. 9.1 FEP) Based on adjusted - - - 30 Jun. 7 Jul. 2.25 numbers (all FEP)

Note: BSEA=Bureau of Special Education Administration.

Source: Thailand PETS, 2014.

110 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand Appendix

Table A8: FEP budget execution rate in FY 2013/14

Planned budget Allocated / Allocated budget Remaining Type of subsidy request by BSEA planned to school (b) (a)-(b) (a) % (b/a) Millions baht % baht Basic subsidy (& 1,310,096,100 1,239,294,750 94.60 70,801,350 top-up) Books 53,328,600 48,906,269 91.71 4,422,331 Uniforms 27,852,400 25,339,190 90.98 2,513,210 Learning materials 26,016,200 22,781,455 87.57 3,234,745 Student development 49,030,300 42,273,410 86.22 6,756,890 activities Total FEP OBEC 1,466,323,600 1,378,595,074 94.02 87,728,526

Note: BSEA=Bureau of Special Education Administration.

Source: Budget Allocation Accounting, BSEA.

Table A9: Difference between BSEA budget allocation and school reception

Items % of school reporting mismatch in resources Step 1 Step 2 (semester 2 of 2013/14 school (semester 1 of 2014/15 year) school year) Basic subsidy (+top-up) 80 90 Books - 50 Uniforms - 40 Learning materials 100 40 Student development activities 90 50 All 90 36

Note: BSEA=Bureau of Special Education Administration.

Source: Thailand PETS, 2014.

Table A10: Allocated per-student subsidy, by category of subsidy, FY 2013/14

Type of subsidy All school % Welfare schools Special schools Basic subsidy (baseline & 22,982.67 90.91 22,876.83 23,283.04 top-up) Books 806.99 3.19 906.58 615.44 Uniforms 418.12 1.65 440.05 375.93

Learning materials 375.91 1.49 401.78 326.17

Student development 697.55 2.76 755.09 586.87 activities Total 25,281.24 100.00 25,380.33 25,187.45

Note: Average of both boarding and day students.

Source: Thailand PETS, 2014.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 111 Appendix

Table A11: School actual spending shares on each subsidy, FY 2013/14 a. All samples Step 1 (semester 2 of Step 2 (semester 2 of FY 2013/14 Type of subsidy 2013/14 school year) 2014/15 school year) Amount % Amount % Amount % Basic subsidy (baseline 55,779,024 92.55 58,716,280 87.30 114,495,304 89.78 & top-up) Books 370,048 0.61 3,559,036 5.29 3,929,084 3.08 Uniforms 815,126 1.35 1,937,964 2.88 2,753,090 2.16 Learning materials 1,214,895 2.02 1,276,106 1.90 2,491,001 1.95 Student development 2,088,503 3.47 1,769,370 2.63 3,857,873 3.03 activities Total 60,267,596 100 67,258,756 100 127,526,352 100 b. Welfare schools Step 1 (semester 2 of Step 2 (semester 2 of FY 2013/14 Types of subsidy 2013/14 school year) 2014/15 school year) Amount % Amount % Amount % Basic subsidy (baseline 27,758,245 94.90 29,514,903 86.21 57,273,148 90.21 & top-up) Books 0 0.00 2,150,683 6.28 2,150,683 3.39 Uniforms 151,610 0.52 1,136,640 3.32 1,288,250 2.03 Learning materials 522,095 1.78 573,210 1.67 1,095,305 1.73 Student development 817,667 2.80 861,865 2.52 1,679,532 2.65 activities Total 29,249,617 100 34,237,301 100 63,486,918 100 c. Special schools Step 1 (semester 2 of Step 2 (semester 2 of FY 2013/14 Type of subsidy 2013/14 school year) 2014/15 school year) Amount % Amount % Amount % Basic subsidy (baseline 28,020,779 90.34 29,201,377 88.43 57,222,156 89.35 & top-up) Books 370,048 1.19 1,408,353 4.26 1,778,401 2.78 Uniforms 663,516 2.14 801,324 2.43 1,464,840 2.29 Learning materials 692,800 2.23 702,896 2.13 1,395,696 2.18 Student development 1,270,836 4.10 907,505 2.75 2,178,341 3.40 activities Total 31,017,979 100 33,021,454 100 64,039,434 100

Source: Thailand PETS, 2014.

112 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand Appendix

Table A12: Percentage of FEP subsidy receipt, spending and use rate, by schools, FY 2013/14

Welfare schools Special schools Type of subsidy Spending Received Use rate Spending Received Use rate (baht) (baht) (%) (baht) (baht) (%) Basic subsidy 57,273,148 62,642,110 91.43 57,222,156 54,582,030 104.00 (+ top-up) Books 2,150,683 2,594,543 82.89 1,778,401 1,767,529 100.62 Uniforms 1,288,250 1,261,100 102.15 1,464,840 893,440 163.96 Learning 1,095,305 1,162,440 94.22 1,395,696 854,530 163.33 materials Student development 1,679,532 2,156,690 77.88 2,178,341 1,484,430 146.75 activities Total 63,486,918 69,816,883 90.93 64,039,434 59,581,959 107.48

Source: Thailand PETS, 2014.

Table A13. Percentage of remaining FEP funds at school level, 2013/14 and 2014/15 school years a. All samples Amount brought Balance % of remaining Fiscal year Received Spending forward carried forward funds 2013/14 32,004,353 92,141,545 90,810,806 33,335,093 26.85 2014/15 33,335,093 131,549,282 126,589,918 38,294,457 23.23 b. Welfare schools Amount brought Balance % of remaining Fiscal year Received Spending forward carried forward funds 2013/14 11,253,293 49,583,623 46,974,443 13,862,473 22.79 2014/15 13,862,473 72,753,751 63,486,918 23,129,306 26.70 c. Special schools Amount brought Balance % of remaining Fiscal year Received Spending forward carried forward funds 2013 20,751,060 42,557,922 43,836,363 19,472,619 30.76 2014 19,472,619 58,795,531 63,103,000 15,165,151 19.38

Source: Thailand PETS, 2014.

Table A14: Expenditures, by categories of school activities, FY 2013/14

Activities Amount % Learning and teaching 90,218,735 78.80 Personal management 1,998,773 1.75 Capital expenses 7,892,338 6.89 General management 14,385,459 12.56 Total basic subsidy (baseline & top-up) 114,495,305 100

Source: Thailand PETS, 2014.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 113 Appendix

Table A15: Learning materials a. Percentage of use Type of school Received Spending Use % Welfare 1,162,440 1,095,305 94.22 Special education 854,530 1,395,696 163.33 All 2,016,970 2,491,001 123.50 b. Cash transfer to households (%) School Type of school % of schools Total Cash transfer Welfare 3 1 33.33 Special education 7 3 42.86 All 10 4 40.00 c. Delays (number of days) Type of school Step 1 (semester 2 of 2013/14 Step 2 (semester 2 of 2014/15 school year) school year) Welfare 5 0 Special education 6.66 0 All 2.6 0 d. Percentage of households spending extra money for learning materials Extra money (baht) % of households Welfare 64 8.57 Special education 193 46.67

Source: Thailand PETS, 2014.

Table A16: Student uniform subsidy a. Rate of use (% of received budget) Type of school Received Spending Use % Welfare 1,261,100 1,288,250 102.15 Special education 893,440 1,464,840 163.96 All 2,154,540 2,753,090 127.78 b. Cash transfer to households (% of schools) School Type of school % of schools Total Cash transfer Welfare 3 1 33.33 Special education 7 4 57.14 All 10 5 50

Source: Thailand PETS, 2014.

114 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand Appendix

c. Delays in subsidy transfers, both cash and in-kind (numbers of days) Type of school Days Welfare 4 Special education 3.6 Average 3.75 d. Percentage of households reporting receiving cash transfer Households Type of school % of households Total Cash transfer Welfare 30 10 33.33 Special education 70 32 45.71 All 100 42 42.00 e. Extra spending by parents for uniforms (% of households) % of Type of school Extra spending (baht) households Welfare 1,021.43 46.67 Special education 861.38 41.43 All 913.49 43

Source: Thailand PETS, 2014.

Table A17: Student development activities a. Percentage of use (a) Percentage of use Type of school Academic-related Boy/girl scouts Field trip ICT activity programmes Welfare 14.01 2.71 18.92 7.89 Special education 33.72 8.08 12.50 2.16 Total 47.73 10.80 31.43 10.04 b. At least one activity is not provided (% of schools) % of schools Type of school Academic-related Boy/girl scouts Field trip ICT activity programmes Welfare 66.67 100 66.67 100 Special Education 85.71 100 100 85.71 Total 80 100 90 90

Source: Thailand PETS, 2014.

Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand 115 Appendix

Table A18: Source of school resources per student (baht/student/year and %)

Public sources Private sources

Type OBEC of Non All School Local and school Budget OBEC fees community In-kind Sources Subsidy Salaries Operating Capital Others values 72,753,751 41,948,062 68,196,289 24,784,000 0 2,250,860.00 0 0 1,112,420 211,045,382 Welfare (34.47) (19.88) (32.31) (11.74) (0) (1.07) (0) (0) (0.53) (100)

58,795,531 73,632,557 40,607,763 29,545,304 0 239,473.00 0 0 7,581,761 210,402,389 Special (28) (35) (19.30) (14.04) (0) (0.11) (0) (0) (3.60) (100)

131,549,282 115,580,619 108,804,052 54,329,3041 0 2,490,3330.59 0 0 8,694,181 421,447,771 All (31.21) (27.42) (25.82) (2.89) (0) (0.59) (0) (0) (2.06) (100)

Source: Thailand PETS, 2014.

© UNICEF Thailand/2011/Athit

116 Public Expenditure Tracking Survey (PETS) on the 15-Year Free Education Program: Kingdom of Thailand