Page 21 - Azerbaijan State University of Economics

Dana Ondrušková , Richard Pospíšil: A Comparative Study of Teacher’s Salary Formula
Methods, Case of Regional School Funding

On the other hand, the individual cases (school unit No 3 and 4) confirm that the
capacities of both student basket formula as well as Phmax formula go beyond the
limits of formula budgeting and the organisational and structural tasks had to be
solved separately. This matter will be discussed in the next analysis.

The analysis of budgeting principles

The above mentioned aspects that result from the comparative part of the study carry
the budgeting on the regional level. In order to answer the second hypothesis, it is
necessary to ask if the new calculation method covers the initial assumptions of the
flexible budgeting described in the chapter 4.2.

From this point of view, the role of process of allocating the funds is supposed to
assess the regional equity of school finance. The method of the Phmax calculation is
able to ensure that the funding cannot be cut below a sufficient level on average.
Nevertheless, it does not cover all necessary components of the chart No 1: Flexible
budgeting process. Keeping these assumptions in mind the flexible budgeting
process consists of the following main points and is assumed in the chart No 3:

These both aspects of missing variables are important from a long-term planning
perspective. They proof that the Phmax formula cannot assure the flexible budgeting
process as described in chapter 4.2. The Phmax formula does not consider long term
strategy policy neither on local nor on national level. The complete budgeting
process follows an approach to use the funding which involves analysis of both
financial and educational data and the identification of effective policies and
programmes that are supposed to improve and support decision making process.
These complex methods of effective managing and planning the financial resources
require comprehensive information about resource inputs, educational processes and
outcomes. It is necessary to keep in mind that the existing data on different aspects
of a school system are often split across levels of governance and different
institutions. All these aspects confirm that it is not possible to transfer the planning
and strategy policies on one level.

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