A.

Introduction
Financial Management is a discipline dealing with the financial decisions corporations make, and

the tools and analysis used to make the decisions. The discipline as a whole may be divided between long-

term and short-term decisions and techniques. Both share the same goal of enhancing a firms value by

ensuring that return on capital exceeds cost of capital, without taking excessive financial risks (Pandey,

2010).

According to (Gitman, 2011) financial management refers to the concepts of time, money and risk

and how they are interrelated. At the individual level, financial management involves tailoring expenses

according to the financial resources of the individual while from the organizational perspective the process

of financial management is associated with financial planning and financial control. Modern approach of

financial management basically provides a conceptual and analytical framework for financial decision

making. It emphasizes on effective use of funds. According to this approach financial management can be

broken down into three different decisions: Investment decisions, Financing decisions and Dividend

decisions (Brealey & Myers, 2007).

Sound financial management practices help to improve the profitability of an organization and

ensure that it has a healthy statement of financial position.

B. Related Literature
This portion contains the review of related literature which has bearing of the cases

investigated.

Revenue Structure
A revenue structure is a framework for generating revenues. It identifies which revenue

source to pursue, what value to offer, how to price the value, and who pays for the value. It is a

key component of a company's business model. It primarily identifies what product or service will
be created in order to generate revenues and the ways in which the product or service will be sold.

Without a well-defined revenue model, that is, a clear plan of how to generate revenues, new

businesses will more likely struggle due to costs which they will not be able to sustain. By having

a clear revenue model, a business can focus on a target audience, fund development plans for a

product or service, establish marketing plans, begin a line of credit and raise capital (Wikipedia)

Sources of Revenue

Batas Pambansa 232, Chapter 5. School Finance and Assistance

Section 33. Declaration of Policy - It is hereby declared to be the policy of the State that

the national government shall contribute to the financial support of educational programs pursuant

to goals of education as declared in the Constitution. Towards this end, the government shall:

1. Adopt measures to broaden access to education through financial assistance and other

forms of incentives to schools, teachers, pupils and students; and

2. Encourage and stimulate private support to education through, inter alia, fiscal and other

assistance measures.

A. Funding of Republic Schools

Section 34. National Funds - Public school shall continue to be funded from national funds:

Provided, That local governments shall be encouraged to assume operation of local public schools

on the basis of national fund participation and adequate revenue sources which may be assigned

by the national government for the purpose.

 Section 35. Financial Aid Assistance to Public Secondary Schools - The national

government shall extend financial aid and assistance to public secondary schools established and

maintained by local governments, including barangay high schools.

Section 36. Share of Local Government - Provinces, cities and municipalities and

barangays shall appropriate funds in their annual budgets for the operation and maintenance of

public secondary schools on the basis of national fund participation.

Section 37. Special Education Fund - The proceeds of the Special Education Fund accruing

to local governments shall be used exclusively for the purposes enumerated in Section 1 of

Republic Act No. 5447, and in accordance with rules and regulations issued by the Ministry of

Education, Culture and Sports and the Ministry of the Budget. Said proceeds shall be considered

a local fund and shall be subject to Presidential Decrees No. 477, Presidential Decree No. 1375

and other applicable local budget laws and regulations.

Section 38. Tuition and other School Fees - Secondary and post-secondary schools may

charge tuition and other school fees, in order to improve facilities or to accommodate more

students.

Section 39. Income from other Sources - Government-supported educational institution

may receive grants, legacies, donations and gifts for purposes allowed by existing laws.

Furthermore, income generated from production activities and from auxiliary enterprises

may be retained and used for schools concerned in accordance with rules and regulations jointly

issued consistently with pertinent appropriation and budgetary laws by the Ministry of the Budget,

the Ministry of Education, Culture and Sports and the Commission on Audit.
 B. Funding of Private Schools

Section 40. Funding of Private Schools - Private schools may be funded from their capital

investment or equity contributions, tuition fees and other school charges, grants, loans, subsidies,

passive investment income and income from other sources.

Section 41. Government Assistance - The government, in recognition of their

complementary role in the educational system, may provide aid to the programs of private schools

in the form of grants or scholarships, or loans from government financial institutions: Provided,

That such programs meet certain defined educational requirements and standards and contribute

to the attainment of national development goals.

Section 42. Tuition and Other Fees - Each private school shall determine its rate of tuition

and other school fees or charges. The rates and charges adopted by schools pursuant to this

provision shall be collectible, and their application or use authorized, subject to rules and

regulations promulgated by the Ministry of Education, Culture and Sports.

Section 43. Income from Other Sources - Any private school duly recognized by the

government, may receive any grant and legacy, donation, gift, bequest or devise from any

individual, institution, corporation, foundation, trust of philanthropic organization, or research

institution or organization as may be authorized by law.

Furthermore, private schools are authorized to engage in any auxiliary enterprise to

generate income primarily to finance their educational operations and/or to reduce the need to

increase students' fees.

 Section 44. Institutional Funds - The proceeds from tuition fees and other school charges,

as well as other income of schools, shall be treated as institutional funds. Schools may pool their

institutional funds, in whole or in part, under joint management for the purpose of generating

additional financial resources.

C. Incentives to Education

Section 45. Declaration of Policy - It is the policy of the State in the pursuit of its national

education development goals to provide an incentive program to encourage the participation of the

community in the development of the educational sector.

Section 46. Relating to School Property - Real property, such as lands, buildings and other

improvements thereon used actually, directly and exclusively for educational purposes shall be

subject to the real property tax based on an assessment of fifteen per cent of the market value of

such property: Provided, That all the proceeds from the payment thereof shall accrue to a special

private education fund which shall be managed and disbursed by a local private school board which

shall be constituted in each municipality or chartered city with private educational institutions with

the mayor or his representative as chairman and not more than two representatives of the

institutional taxpayers, and, likewise, not more than two residents of the municipality or chartered

city who are alumni of any of the institutional taxpayers as members: Provided, further, That fifty

percent of the additional one percent tax on real estate property provided for under Republic Act

5447, shall accrue to the special private education fund: Provided, finally, That in municipalities

or chartered cities wherein the number of private institutions with individual enrollment of pupils

and students over five thousand exceeds fifteen, the members of the private school board shall be

increased to not more than fourteen members determined proportionately by the Minister of

Education, Culture and Sports. The private school board shall adopt its own rules which shall
enable it to finance the annual programs and projects of each institutional taxpayer for the

following purposes; student-pupil scholarships; improvement of instructional, including

laboratory, facilities and/or equipment; library books and periodicals acquisition; and extension

service in the community, in that order of priority.

Section 47. Relating to Gifts or Donations to Schools - All gifts or donation in favor of any

school, college or university recognized by the Government shall not be subject to tax; Provided,

That such gifts or donations shall be for improvement of classrooms and laboratory of library

facilities, and shall not inure to the benefit of any officer, director, official, or owner or owners of

the school, or paid out as salary, adjustments or allowance of any form or nature whatsoever,

except in support of faculty and/or professorial chairs.

Section 48. Relating to Earnings from Established Scholarship Funds - All earnings from

the investment of any duly established scholarship fund of any school recognized by the

government, constituted from gifts to the school, and/or from contributions or other resources

assigned to said fund by the school, if said earnings are actually used to fund additional scholarship

grants to financially deserving students shall be exempt from tax until the scholarship fund is fully

liquidated, when the outstanding balance thereof shall be subject to tax.

Section 49. School Dispersal Program - All gains realized from the sale, disposition or

transfer of property, real or personal, of any duly established private school, college or university,

in pursuance of a school dispersal program of the government or of the educational institution as

approved by the government, shall be considered exempt from tax if the total proceeds of the sale

are reinvested in a new or existing duly established school, college, or university located in the

dispersal site, within one (1) year from the date of such sale, transfer or disposition; otherwise, all

taxes due on the gains realized from the transaction shall immediately become due and payable.
 Section 50. Conversion to Educational Foundations - An educational institution may

convert itself into a non-stock, non-profit educational foundation, in accordance with the

implementing rules to be issued jointly by the Ministry of Education, Culture and Sports and the

Ministry of Finance.

In the case of stock corporations, if for any reason its corporate existence as an educational

institution ceases and is not renewed, all its net assets after liquidation of the liabilities and other

obligations may be conveyed and transferred to any non-profit educational institution or successor

non-profit educational institution or to be used in such manner as in the judgment of said court

will best accomplish the general purposes for which the dissolved organization was organized, or

to the State.

D. Assistance to Students

Section 51. Government Assistance to Students - The government shall provide financial

assistance to financially disadvantaged and deserving students. Such assistance may be in the form

of State scholarships, grants-in-aid, assistance from the Educational Loan Fund, or subsidized

tuition rates in State colleges and universities.

All the above and similar assistance programs shall provide for reserve quotas for

financially needed but academically qualified students from the national cultural communities.

Section 52. Grant of Scholarship Pursuant to Existing Laws - Educational institutions shall

be encouraged to grant scholarships to students pursuant to the provisions of existing laws and

such scholarship measures as may hereafter be provided for by law.

Section 53. Assistance from the Private Sector - The private sector, especially educational

institutions, business and industry, shall be encouraged to grant financial assistance to students,

especially those undertaking research in the fields of science and technology or in such projects as

may be necessary within the context of national development.

Republic Act 5447 AN ACT CREATING A SPECIAL EDUCATION FUND TO BE

CONSTITUTED FROM THE PROCEEDS OF AN ADDITIONAL REAL PROPERTY TAX

AND A CERTAIN.

In line with the governments policy to provide support to the goals of education, this act

was created the Special Education Fund. It is a law establishing a special education fund to be

drawn from the additional tax on real property and from a certain portion of the taxes on Virginia-

type cigarettes and an additional tax from real property. It also outlines the activities to be

financed, creation of a school board for this purpose and fund appropriation.

One of the activities of the Department of Education to be financed by the Special

Education Fund is the organization and operation of extension classes, most especially in the

remote areas. The objective of which is to contain all school age children who desires to enter

Grade I. It also encompasses the creation of teacher positions, head teachers and principals; as

well as the adjustment of their salaries. Other activities and programs to be financed by the Special

Education Fund are the programming of the construction and repair of school buildings,

workshops, laboratories and other equipment and apparatus for schools offering vocational

courses; as well as the provision of instructional materials and school facilities.

 It also encompasses the creation of a local school board in every province, city and

municipality. It is the duty of the local school board to decide on the annual budgetary needs of

operation and maintenance of the public schools.

National Fund for Government Schools

One of the main source of fund for government schools, elementary, secondary, or trade

school is the Maintenance and Other Operating Expenses, also known as MOOE.

Operating Expenses are expenses that are incurred while running a business. Maintenance

Expense could be considered anything from the cost of maintaining a company vehicle to repairs

made on a building or some other type of "maintenance" that is require by the business in order to

function at 100%. Many expenses have their own account such as, Utilities Expense, Rent

Expense, Insurance Expense, Interest Expense, Supply Expense, just to name a few. Other expense

may not have a specific account in which to be recorded, such as Travel Expense, Food Expense

(perhaps to entertain a possible client), these expense are often listed under "Other Expenses".

MOOE EXPENSE CODE 200

This account includes travelling expenses, communication services, repair and

maintenance, transportation services, supplies and materials, water, illumination and power

services, chalk allowance, auditing services, trainings and seminar expenses.

Legal Bases. The following are the legal bases of these guidelines:

A. Department of Budget and Management (DBM) and DepEd Joint Circular No. 2004-

1 dated January 01, 2004 entitled Guidelines on the Direct Release of Funds to

DepEd-Regional Offices and Implementing Units;

 B. Section 10, Republic Act No. 9155 (Governance of Basic Education Act of 2001)

which provides that the appropriations intended for the regional and field offices

(elementary/secondary schools and schools division offices) are to be allocated

directly and released immediately by the DBM to the said offices; and

C. Section 10 of the DepEd Special Provisions, Republic Act No. 10147, the

General Appropriations Act (GAA) of Fiscal Year 2011.

Implementation Requirements
a. The implementing units (IUs) are capable of administering their own funds since

they have position items assigned to handle cashiering and bookkeeping functions, whether

on a permanent or temporary basis.

b. The DBM has already assigned agency codes to the said IUs, hence, they are

authorized to open Modified Disbursement Scheme (MDS) Sub-Accounts in government

depository banks and that the cash allocations intended for the aforementioned IUs are

directly issued by the DBM to their respective MDS Sub-Accounts

c. The IUs are required to maintain sets of books of accounts.

d. The MDS Sub-Accounts of Schools Division Offices (SDOs) shall cover

transactions of the SDO (Proper), elementary schools (ESs) and secondary schools (SSs)

without financial staff, and may also include SSs with financial staff that have no access to

the banks, etc.

Responsibilities of Implementing Units (IUs)
a. The DepED-Central Office (CO) shall...
a. 1. provide the Regional and Schools Division Offices with a matrix showing
the MOOE allocation of every public elementary school out of the appropriation
authorized for MOOE for each Schools Division Office under the Elementary
Education as reflected in the GAA; and
a.2. post on its website the allocations for elementary schools as mentioned in
Item 3.1.1 hereof.
b. The Schools Division Offices (SDOs) shall...
b.1. inform the heads of ESs and SSs without financial staff of their allotment
and/or cash allocation for MOOE;
b.2. download in full to the heads of elementary schools and non-implementing
secondary schools their MOOE allocations through cash advance using the replenishment
method.
The SDOs are prohibited from undertaking centralized procurement of any good
or service out of school MOOE intended for distribution to schools in kind.

In extreme cases, however, the SDOs may procure items using school MOOE
provided that they submit a report to the Office of the Secretary through the Office of the
Undersecretary for Finance and Administration explaining the need for such items;
describing the nature, type, quantity and price of those items listed by the receiving
school; and presenting the estimated price difference between the division and school
procurement, and the name of the supplier including the mode of procurement used.

While the report does not require pre-approval, SDOs must submit such report
within thirty (30) days after the conduct of the procurement, for audit and monitoring
purposes.

b.3 submit to the Office of the Secretary through the Office of the Undersecretary
for Finance and Administration monthly reports on the status of the downloading of
school MOOE and its utilization.
C. The Elementary School (ES) and Secondary School (SS) Without Financial
Staff shall...
c. 1. apply for bonding with the Bureau of Treasury, Fidelity Bond Division;

c.2. draw cash advance from their supervising/directing SDO for their MOOE
requirements;
 c.3 pursuant to Item H.1.1 of the Manual on Simplified Accounting Guidelines
and Procedures for the Use of Non-Implementing Units/Schools, Version 2008, submit to
the SDO on or before the 5th day of the following month the original copy of the Cash
Disbursement Register (CDR), the paid Disbursement Vouchers (DVs) and all supporting
documents which shall serve as liquidation or replenishment of the cash advance granted.
Subsequent cash advance shall be granted only upon receipt of the CDR equivalent to at
least 75% of the previous cash advance.
It is reiterated, however, that any remaining cash advance at the end of the year
must be liquidated in full and unexpended balances be refunded; and
c.4. disburse funds in accordance with the existing budgeting, accounting,
procurement, and auditing rules and regulations.

Uses of School MOOE

The following are the uses of MOOE: 1) to fund activities as identified in the
approved School Improvement Plan (SIP) which are for implementation in the current
year particularly in improving learning outcomes and as specifically determined in the
Annual Implementation Plan (AIP) of the school; 2) to pay expenses for utilities (e.g.
electric and water expenses);

Fiscal Management System

Good Financial Management Practices
Challenges Confronting their Financial Management System

C. Profile of Each Educational Institution

Public Elementary and Secondary School

Public elementary schools are government owned schools in the Philippines. In the

Division of Marinduque, there are 181 elementary schools in the nine districts namely: Boac North,

Boac South, Buenavista, Gasan, Mogpog, Santa Cruz East, Santa Cruz North, Santa Cruz South,

and Torrijos Marinduque.

 In general, each public school across the country is funded by the government to support

its expenses. One of the main source of fund is the MOOE.

Secondary School
Trade School
Agricultural School

D. Comprehensive Discussion and Analysis of Findings

E. Conclusion
F. Recommendation
G. Bibliography