Appendix 1: Calculation of Non-personnel Expenditure Standards
3.3 Problems and Countermeasures of the TEOS Policy
Based on the analyses presented in this chapter, we have summarized the problems in the policy implementation process and give corresponding policy suggestions.
3.3.1 Problems and Countermeasures of the Miscellaneous Fee Exemption Policy
3.3.1.1 Problems
First, the miscellaneous fee exemption policy brings about a shortage of non-personnel expenditures. The reason is that thefiscal appropriation standards for the miscellaneous fee exemption are lower than the standards for miscellaneous fees.
Second, because there are some differences in the miscellaneous fee exemption standards among provinces and among counties in most provinces, the standards of miscellaneous fee exemption appropriation from the central government to pro- vincial governments and from provincial governments to county governments are different among provinces and among counties. This approach of miscellaneous fee exemption appropriation leads to new inequities.
Third, the number of students in the appropriation formula is the statistic number from the previous year, so thefiscal appropriation does not meet the real demand.
Finally, the free textbook policy does not cover private school students and children of migrant farmers.
3.3.1.2 Countermeasures
Considering the problems of implementing miscellaneous fee exemptions, there is much room to improve this policy.
First, the central government should set up a benchmark for non-personnel expenditures and provide an adjustment coefficient for non-personnel expenditures.
Miscellaneous fee exemptions are part of student assistance policies and can reduce the burden of students’families. Actually, in the past, miscellaneous fees were used as non-personnel expenditures in schools. In essence, a miscellaneous fee exemp- tion means that the non-personnel expenditures of schools are no longer driven by miscellaneous fees but by the government. From this point of view, the miscella- neous fee exemption is just a temporary arrangement. In the end, the government should set a benchmark for non-personnel expenditures that is adequate to ensure school operation. Meanwhile, the government should also design adjustment coefficients for benchmarks of non-personnel expenditures, based on regional geographic variation, price variation, school and class scale variation, and others.
Second, miscellaneous fee exemptions should cover the students of non-profit private schools. In recent years, the miscellaneous fee exemption policy has cov- ered all students in official compulsory education. To provide equal treatment to all children in rural areas, the miscellaneous fee exemption policy should also benefit students who attend private schools with education vouchers.
Third, the miscellaneous fee exemption policy should cover the children of migrant farmers. In the process of urbanization, many farmers migrate to urban areas. Their children also migrate to urban areas with them. In urban areas, these children are the disadvantaged group. They cannot benefit from miscellaneous fee exemptions due to the procedure and qualification certificate. The miscellaneous fee exemption policy must cover the children of migrant farmers to ensure these children’s compulsory educational rights.
Fourth, it is crucial to check the real current enrollments in compulsory edu- cation for the number of students in the appropriation formula. Whether the appropriation for miscellaneous fee exemptions can meet the need of non-personnel expenditures of a school is determined by the number of students in the appro- priation formula. We shouldfind a reliable way to get the real enrollment in time.
3.3.2 Problems and Countermeasures of the Free Textbook Policy
3.3.2.1 Problems
First, the free textbook policy only covers textbooks for the national curriculum.
Local curriculum textbooks and ancillary materials are still purchased by the stu- dents’families.
Second, the allocation of the free textbook fund has some problems at each level of government. Some provinces with a high percentage of poor students to total students get a low percentage of free textbook funds, while the coverage for free textbooks is higher in provinces with less indigent students. In some counties, free textbook support does not favor poor families because the method to select the poor students is not clear and objective.
Lastly, and the same problem as with the miscellaneous fee exemption policy, the policy does not give enough attention to migrant children and the indigent students of non-profit private schools.
3.3.2.2 Countermeasures
Considering the problems of implementing a free textbook policy, we suggest some ways to strengthen this policy.
First, the funding standard for free textbooks should be increased so that the free textbook policy can cover not only national curriculum textbooks but also local curriculum textbooks and ancillary materials. Before the end of this study, based on the same concern, the government improved the free textbook policy and stipulated that the provincial government would be in charge of providing free local curric- ulum textbooks. However, there are still some controversies on the ancillary materials, because it is difficult to give clear definitions on ancillary materials.
Second, in order to let migrant children and non-profit private school students enjoy free textbooks, government can borrow from international experience with education vouchers to design a voucher system for the migrant children and stu- dents at non-profit private schools.
Third, although the free textbook policy has covered all students in rural com- pulsory education since autumn 2007, we still need to attach importance to those problems in the allocation of free textbooks. The government should set up a relative information system and reasonable appropriation formula in order to improve the method to select poor students and the method to allocate funds.
3.3.3 Problems and Countermeasures of the Living Subsidy Policy for Indigent Boarding Students
3.3.3.1 Problems
Compared with the “two exemptions” policy, the progress of the “one subsidy” policy has much room for improvement.
First, there are no clear provisions on the coverage and subsidy standard—both the coverage and the standard are very low. For example, in Rong’an within Guangxi, the subsidy standard is 150 Yuan per year per student. However, a primary school student’s living cost is about 123 Yuan per month. The 150 Yuan subsidy accounts for about one-tenth of the living cost. The indigent student will be in a difficult situation with such a low subsidy.
Second, the subsidy does not cover non-boarding indigent students. These poor students also are faced with a living cost burden, which may lead to them drop out of school.
Third, the assistance approach of the subsidy is unitary. The subsidy only pro- vides cash to students or their parents. This approach cannot ensure that all of this cash is used for students’living costs.
Fourth, the method to select eligible students needs to be improved urgently.
After this policy extends its coverage gradually, if the method is not perfect, the policy will deviate from its intended target groups.
3.3.3.2 Countermeasures
Considering the problems of implementing a free textbook policy, there exists much room to improve this policy.
First, local governments should set up scientific subsidy standards. Based on the boarding student’s actual living costs, the government should set up a reasonable subsidy standard to ensure that the subsidy can guarantee the student’s living.
Second, the government should design a clear method to select poor students in order to guarantee the objective of this policy. The subsidy should assist all targeted students selected by the scientific method. Based on this authentic method, we can get the number or the percentage of indigent students. Then, we can determine the need for funding of the indigent student subsidy.
Third, the subsidy should not only target poor boarding students but all poor students.
Fourth, it is crucial to design multiple approaches to assist poor students.
Currently, the approach to assist the poor students is relatively unitary. Because the need for the subsidy is quite complex in practice, when we design the approach to assist poor students, we should take into account the complexity of providing multiple approaches for the subsidy. Taking Zhejiang as an example, the govern- ment provides a free lunch for poor students who need to take lunch at school.