Pacitan: A Pioneer in Operational Funding
After the workshop in Yogykarta at the beginning of September, three district, Pacitan, Problinggo and Banyuwangi started explore the possibility of implementing allocation of funding by formula to schools. This is an important part of developing School Based Management (SBM), a system which delegates more decision making to school level.

Dinas Pendidikan from Pacitan district have already taken the initiative and put an formula based allocation of funding schools into their 2003 budget plans. The formula is based on a fixed sum per school combined with an amount based on the number of pupils. In the development program for 2004 of Dinas Pendidikan, Pacitan, which is still in the form of a proposal for the 2004 budget, a sum of Rp. 24,000 per primary school pupil is being proposed. This means that a school of 200 pupils will expect to get Rp.4.8 million per year. Besides that each primary school will get an administrative allowance of Rp.286,000 per year to be used to support teaching and for reproducing pupil worksheets. The allocation at junior secondary school level will be between Rp.6 million and Rp.57 million, but only for state junior secondary schools (SLTP Negeri). The formula for allocating funding will be improved in future as the supply of school data improves. The Bupati and local parliament have already expressed their support for raising the allocation of operational funding so that the quality of education in Pacitan can rise rapidly. The finance department and Bappeda (the local development agency) in Pacitan are going to develop a system of financial planning, budgeting and reporting at district and school level to suit the particular needs of the education system.

Education Funding in the City of Magelang: The Challenge of Developing SBM
The management of school finance in the City of Magelang is an example of innovation in the development of School Based Management. All schools in the City of Magelang, primary and secondary, receive a different amount of operational funding. The allocation of the funding is calculated on the basis of the number of pupils, level of poverty, the physical condition of the school and the school performance. As a result the allocation of funding to schools is based on principles of equity and efficiency. The amount of funding to support school operations is considerable. In the year 2002 the funding per primary school was between Rp.3 million and Rp.12 million and for junior secondary schools between Rp.11 and Rp.56 million per year.

This development of school funding based on a transparent formula can only be done if the district has complete data on all its schools concerning these criteria of equity and efficiency. The equity criteria can be worked out from data on the number of poor pupils compared to the total number of pupils, which will give a figure for the level of poverty in the school. There are two factors in the efficiency criteria. The first concerns the physical condition of the school. The second concerns performance of the school, in this case measured by the pupil’s mastery of their lessons. To measure this the results of the school leaving examination (formerly EBTANAS, now UAN – Ujian Akhir Nasional) are used.

Block Grants in Pekalongan
The Bupati of Pekalongan was sure that if funding for rehabilitation and building was given directly to schools for them to manage by themselves this would develop a sense of ownership. These block grant should result in a better quality and quantity of building, At the end of the 2002-2003 school year 17,017 pupils finished primary school, but there were only 11,000 junior secondary school places. On the assumption that 75% of the children finishing primary school (12,762 pupils) would need places in junior secondary schools, there was clear need for extra classrooms. So it was agreed to allocate a total of Rp.1.5 billion (US$180,000) to be shared among 50 schools. The amount of the grant was Rp.30 million per school, but schools had to contribute counterpart funding, so that the whole amount became Rp.50 million per school. As the amount of funding was limited and there were large number of schools seeking funding, there needed to be a transparent selection process. So a series of meetings were held to let all stakeholders in schools know what the criteria were. Then a selection team from Bappeda, Dinas Pendidikan and the Dewan Pendidikan surveyed the schools which had a large enrolment of pupils which they could not accommodate. In this way the Bupati was able to allay the doubts which had arisen at the start. Based on the work of the selection team the district drew up a Decree of the Bupati of Pekalongan No. 420/135, 2003 concerning the selection of schools to receive the block grant for public and private junior and senior secondary schools (SLTP, MTs, SLTA, MA) in Pekalongan district.