Non-Salary Budget Pakistan 2017-18

Project Duration: 2022 to

The Non-Salary Budget (NSB) was introduced in 2014, starting in 9 districts and phased into all 36 districts by 2016. It replaced the School Management Committee (SMC) funds as the main development grant to schools. The innovation was the direct transfer of NSB funds to a school bank account, removing the need for school heads to have expenditure approved by the Auditor General’s office. Additionally, NSB funds allocations in 2014 were formula-based; the formula in turn was need-based and linked to enrollments.

This policy revision was introduced as part of the Punjab Education Support Program II in 2013/14, and the objective was to increase school level financing in an efficient and effective manner. The objective of enhancing autonomy of school management and planning with the ultimate goal of improving learning in government schools has also been mentioned as a policy objective.

The 2014 NSB formula incorporated principles of adequacy, transparency, efficiency and equity. It introduced the principle of enrollment-based school financing to Punjab. It also took into account administrative feasibility for operating the formula by basing its calculations on administrative indicators that are collected and updated annually, ensuring that the formula calculations were as accurate and sharp as the data would allow.

The formula application and function has been evaluated (third party valuation). The constraints to effective functioning of the formula emerge from the system in which it is being implemented: inefficiencies in mechanisms of funds transfers in the finance department, and persistent inertia in school management practices (in not all but a majority of schools), limitations of available administrative data.

Following a couple of years of operations, a revision of the formula has been commissioned to introduce updates based on the evolving nature of school needs, and policy priorities of the school education department. This research presents the details of the formula revision exercise.

Research Outputs