An Analysis of the Competency Required of Principals for Effective Financial Management in Secondary Schools
1.1 BACKGROUND OF THE STUDY
Education is a powerful transformational instrument in any community and should be valued highly. It is the learning of information and skills necessary for individual, group, and organizational growth at all levels and sectors of life. Education has long been seen as critical to personal and societal development in all countries across the world (Ogunu, 2000). Various declarations on education have been issued at the global and national levels in recognition of the vital role of education in the development of man and contemporary society. Considering governments’ massive investment in public education, its outcome in terms of student quality, an apparent reduction in student performance, attitude, and values has been at odds with government expenditure (Hornby, 2000). The Federal Government established educational programs at the pre-primary, primary, secondary, and tertiary levels. Secondary education is the education that children get following elementary school but before entering the postsecondary stage. Secondary education is focused, especially on educating Nigerian individuals for meaningful life within society and further education. In addition to their time-consuming administrative duties, they also serve as financial managers in their respective schools.However, the majority of them are unsure how to handle their school finances (Ogbonnaya, 2006). As a result, as a prerequisite for successful secondary school administration, school leaders must have financial management abilities (Ogunu, 2000). From the beginning to the present, the critical function of school principals as financial managers has evolved dramatically. This is due to a variety of factors, including political, demographic, and scientific revolutions; expanded school principal duties; the requirement for high quality; and an upgraded education system to meet the worldwide demand for human capital to manage development programs (Hornby, 2000). Effective school administration necessitates the achievement of the educational institution’s stated goals. It is a condition in which financial, capital equipment, and human resources are successfully used to meet the school’s goals. As a result, good school administration is heavily reliant on the efficient use of school resources, particularly financial resources.
Financial resource management is one of the tasks of educational administration, and secondary schools require funds to carry out their activities and programs. According to Ogbonnaya (2005), no organization can exist or perform its tasks efficiently unless it has appropriate financial resources. He went on to say that money is required to pay employees, operate factories, and sustain necessary institutional functions. That is why, as Ogbonnaya (2006) pointed out, the most essential component of any educational development is not its projections and production objectives, nor its list of educational priorities, but the portion that deals with budgetary resources. This is due to the fact that the adequacy and modality of school buildings, furnishings, and quality supervision are determined by the financial basis. School leaders require financial resources for a variety of reasons, including salary payments, upkeep of school buildings and facilities, academic field practice fees, extra-curricular activities, and other school programs. Other contributions include: using advanced teaching and learning technologies; purchasing new school buildings and classroom materials such as books and laboratory equipment. This means that the success of any school plan is heavily reliant on the management of financial resources, which in turn improves overall school performance (Griffith, 2001).
Financial management is the art and science of employing money in order to maximize the economy and value of the available funds. Financial management is the lifeblood of every firm; all of its commercial operations rely on it. According to Solomon, it is the effective use of economic resources such as capital money. It is an essential component of the organization’s overall management. According to S.C. Kuchal, the most prevalent and acceptable definition is that it deals with the acquisition of finances and their optimal application in the firm. As a result, financial management entails the effective and efficient administration of finances. Financial management deals with and has an impact on other departments such as people, advertising, and production. The goal of financial management is to maximize profit and wealth. A well-managed budget ensures the provision and usage of school finances and equipment. According to Onyedinma (2001), financial management “must be founded on strong financial planning, produce adequate income to support the plan, regulate expenditure, and handle specific problems.” Griffith (2001) defines financial management as planning, sourcing money, processing receipts, purchasing, disbursing, and accounting. They observed that without a well-planned budget, it is impossible for secondary school administrators to maintain school activities viable, the program balanced, and the individuals who manage it honest for a prolonged period of time. They said that in the lack of an activity budget, students and instructors become careless about accumulating liabilities, and the secondary school administrator is encouraged to source and manage cash for the school. If adequate financial planning is missing, numerous activities and educational programs may be jeopardized. Financial management is essential for avoiding waste and making the best use of the finances available to the organization to fulfill its goals. Nnaji (1998) commented on the necessity of management, saying that “financial activities have always been crucial in every firm’s management, regardless of size.” According to him, each enterprise’s financial structure should be able to ensure that its financial duties of planning and regulating are carried out as efficiently as possible. To ensure optimal use of finances, efficient and successful administration necessitates careful planning and oversight. As a result, financial management is critical for an organization’s efficient and effective use of finances. Financial management ensures that money is used efficiently.
According to Harl (2001), secondary school administrators must be competent not only in budget development and administration but also in budget execution based on projections. Ogunu (2000) emphasized the need to establish and sponsor fund-raising activities in schools. Okunamiri (2002) demanded that secondary school principals have the necessary abilities in budget disbursement. He ascribed the failure of the school board’s financial management personnel to their inability to release cash for program execution. According to Ogbonnaya (2002), in addition to budget preparation and execution abilities, heads of schools must also be capable of monitoring financial records in schools, guaranteeing wise use of imprest and keeping expenditure in check.
1.2 STATEMENT OF THE PROBLEM
According to Harl (2001), the bad status of schools in Nigeria was caused by financial management challenges such as the failure to produce revenue internally and the mismanagement of limited resources. The principle is the school’s top accounting officer, charged with the fiscal job of ensuring accountability and efficiency in the administration of financial resources in order to achieve school goals and objectives. Nnaji (1998) outlined the difficulties that school administrators encounter in handling school budgets. This included, among other things, incompetence in procurement, poor and irregular audits, a lack of accounting supporting documentation and records, and an inability to generate end-of-year financial statements. According to Griffith (2001), school principals must have financial management abilities in order to be effective in planning, sourcing, and utilizing school money. The federal government of Nigeria’s budgetary contribution to the education sector is less than twenty percent (20%), which is insufficient to support excellent education. Given Nigeria’s limited budgetary allocation to the education sector, it is critical for school leaders at all levels to have essential skills in managing the money allotted for school reform.
1.3 OBJECTIVES OF THE STUDY
The primary aim of this study is to analyse the competency required of principals for effective financial management in secondary schools. Other objectives of this study are:
- To identify various competencies principals need for effective financial management.
- To determine weather there is any relationship between principal’s financial management skill and effective financial management in secondary schools.
iii. To ascertain if there is a relationship between principal’s experience and effective financial management in secondary schools.
1.4 RESEARCH HYPOTHESES
In the course of this study, the following hypotheses will be tested.
H01: There is no significant relationship between principal’s financial management skill and effective financial management in secondary schools.
H02: There is no relationship between principal’s experience and effective financial management in secondary schools.
1.5 SIGNIFICANCE OF THE STUDY
This study will be of great importance to principals because the results of this study will reveal that where financial resource management is not effective, the achievement of its goals of secondary education will be destroyed and the schools will be run down, thus the need for training. Finally, this study will be of great importance to scholars as it will serve as an avenue for further research.
1.6 SCOPE OF THE STUDY
This study will be focused on the analysis of the competency required of principals for effective financial management in secondary schools. The study will further cover the various competencies principals need for effective financial management, the relationship between principal’s financial management skill and effective financial management in secondary schools, and the relationship between principal’s experience and effective financial management in secondary schools. Respondents for this study will be obtained from Secondary School Education Board (SSEB), Akwa Ibom State.
1.7 LIMITATIONS OF THE STUDY
In the course of carrying out this study, the researcher experienced some constraints, which included time constraints, financial constraints, language barriers, and the attitude of the respondents.
In addition, there was the element of researcher bias. Here, the researcher possessed some biases that may have been reflected in the way the data was collected, the type of people interviewed or sampled, and how the data gathered was interpreted thereafter. The potential for all this to influence the findings and conclusions could not be downplayed.
More so, the findings of this study are limited to the sample population in the study area, hence they may not be suitable for use in comparison to other schools, local governments, states, and other countries in the world.
1.8 DEFINITION OF TERMS
Analysis: detailed examination of the elements or structure of something.
Competency: the ability to do something successfully or efficiently.
Financial management: Financial management is the planning, organizing and controlling of inflow and outflow of money aimed at achieving organizational success and development.
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