An Exploratory Study of Performance-Based Budgeting Practices in Indonesian Private School

Abstract

The demands of bureaucratic reform are challenges and prospects for educational institutions. In Indonesia, private school management has a very different character from public schools because it has a high financial dependence on foundations. Sources of funding at private schools come from parents, foundations, governments, donations/grants. Prior research provided empirical evidence that the implementation of planning and budgeting in schools has not been well managed and it has many obstacles. The purpose of this paper was to explore the budgeting process, stakeholder participation level, the constraints in the budgeting process, and the implementation of performance-based budgets in vocational high schools. The research was conducted in three private schools around Semarang City Indonesia. Respondents in this research were principals, treasurers, foundation boards, committees, teachers, students, staff, and parents. The results showed that the budget in private schools has not been based on vision, mission and school goals. The funds mostly used to finance the daily activities in teaching and learning. The most dominant role in determining the budget post was the treasurer and the board of the foundation, it because of the lack of human resources. The school budget in the autonomy era is expected to be formulated with a performance approach that prioritizes the achievement of goals.

Performance-based budgeting in private Islamic schools: Evidence from Eakkapa Sasanawich Islamic School in Thailand

“…The PBB process has several stages of the implementation process. First, the planning stage, namely estimating the funds spent for each work program by estimating the amount of revenue that will be obtained in the future (Wahyudin et al, 2018). Of course, all processes must align with the vision, mission, and policies that apply to the organization.…”

“…Third is budget implementation, namely implementing the program by mutually agreed commitments; fourth is budget reporting and evaluation, namely the preparation of a budget report by the relevant work unit and then reporting it to the head of the institution. The report at least includes information on the amount of budget allocation, the amount of funds that have been used, performance achievements or work programs that have been implemented, and finally, the remaining budget that has not been absorbed or work programs that have not been implemented (Achdiat, 2010;Wahyudin et al, 2018).…”

The Impact of Implementing New Public Management, Performance Budget Reporting Models in Educational Institutions

“…The New Public Management Technique (NPM) encourages businesses to implement public sector budgeting strategies, particularly performance budget reporting (Feng, 2019). Approach This budgeting method is beneficial because it relates to meeting input, output, and outcome targets, as well as the vision, mission, strategic goals, and organizational goals (Wahyudin et al, 2020). From the viewpoint of the New Public Management, these recommendations are designed to change the transparency and accountability aspects of school performance (NPM).…”