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Article
Author(s)
Paul A. Odundo, Charles M. Rambo
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DOI:10.17265/1537-1506/2013.06.001
Affiliation(s)
Paul A. Odundo, Ph.D., Department of Education Communication, University of Nairobi.
Charles M. Rambo, Ph.D., Department of Extra Mural Studies, University of Nairobi.
ABSTRACT
This study was conducted to determine the value added by Income-Generating Activities (IGAs) on the financial performance of public secondary schools, in terms of assets, liability portfolio, and net worth. Secondary school managers have the gigantic task of balancing meager resources between subsistence and development needs as well as good performance in national examinations. However, macro-economic shocks such as inflation, fuel shortage, and crop failure, among others, often militate against the success of public schools. School-based IGAs enable public schools to cope with external economic shocks, without necessarily passing down budgetary adjustments to parents. However, the country lacks a clear policy guideline to facilitate the initiation, management, accounting, reviewing, and financial reporting of IGA projects. Besides, there is no documented information regarding the value added by IGA initiatives to the financial performance of public secondary schools. The study found that IGA and non-IGA schools were significantly different in terms of category, student population, age, annual income, and number of paid workers. Schools having IGAs were 1.9 times more likely to own as many assets as schools not having IGAs. Besides, IGA schools were about 2.2 times less likely to have their liability in excess of the median threshold. Regarding net worth, the study found that schools having IGAs were about 2.1 times more likely to be operating above the median threshold; suggesting that schools having IGAs were wealthier than non-IGA schools. Based on the findings, this study concludes that IGA projects were beneficial to schools by improving the ability of schools to accumulate assets and manage their liabilities. The study recommends the need to: formulate an appropriate policy framework to guide and standardize IGA activities; initiate suitable training programs for school IGA managers; as well as engage business development managers to advice schools on IGA matters.
KEYWORDS
income-generating activities, financial performance, public secondary schools, education financing, macro-economic shocks
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