March 12, 2002 keralamonitor.com

 

Indian School Board to introduce New Rules based on Parents Survey

 

Annual Staff Cost of an Indian School in Muscat is Rs. 16.25 crores!!!

 

School incurs deficit of 1.64 Crores. Due to interest rate decline profit to fall further in 2001.

 

Indian School board is likely to replace most of the old auditing firms which have been giving clean chits to various Indian School annual reports. From next financial year onwards, new auditors are likely to replace the old ones. However, a review of the audited balance sheet of one of the Indian schools is self revealing. Instead of protecting these white elephants, it is possible to run these schools efficiently at a reduced monthly fees.

 

The staff cost of a leading Indian School in the Gulf is a whopping Rs. 16.25 crores!!!. The school, which according to the audit reports, has incurred a net deficit during the year 2000, retained a positive balance sheet only because of interest earnings from investments. Despite charging heavy fees, these Indian schools are said to be incurring financial losses. According to experts, there is reason to suspect financial mismanagement in schools and by using accounting jimmicks, they are definitely showing accounts at an inflated cost. While the salary of an ordinary teacher is said to be less than Indian Rupees 20,000, sometimes less than that, students pay more than Rs.2800 as monthly fees.

 

The manner in which school finances have been shown in the so called audited balance sheets makes interesting reading. In the case of a leading Indian school, the staff cost for the two financial years ( from July 1, 1998-- to 1 July 1999) and (from July 1, 1999-- to 1 July 2,000) is a whopping RO 2.6 million Rials - nearly equivalent to 32.5 Crores of Indian Rupees. The average monthly salary of a teacher working in the school is less than RO 200-250! And the fees charged per student is aroud Indian Rs.2,800 per month. And many people are working below that salary. How the school could incur a mindboggling amount for 'staff expenses' raises some doubts about the whole audit report.

 

Other operating expenses of the school for the same years is given as RO 290,846 and RO 263,979. Despite huge revenues of RO 1,640,796 (1999-2000) and RO 1,665,645 (1998-1999), the school incurred deficit from the operating activities While it recorded a deficit of 131,692 in 1999-2000 and RO 62,134 (1998-1999), the school finance was turned into a surplus one only because of the interest income earned from huge amount of fixed deposits in banks.

 

Even though the accompanying accounting notes are an integral part of the school accounts, the school management committee has displayed the accounts without these notes. It is to be monitored whether the school finances will become surplus in the year 2001! The old school president has resigned and the former patron has already left the Sultanate. Now who will scrutinise the accounts and explain these financial details is the billion dollar question. Most of the schools have not revealed their financial reports to the public. The story may not be different for private schools but for that one needs to see an audited balancesheet first. (kerala monitor.com)