An Analysis of the Financial Structures of Vocational High Schools
Dong-Sun Choi, Nam-Hui Kim, and Ji Un Jung
The objective of this study was to systematically analyze the financial investment, distribution, and execution of secondary vocational education. The focus was vocational high school accounts and the policies for funding vocational secondary education. Specifically, (1) vocational secondary education policies and financial support were analyzed. The study reviewed the flow of education funds, especially those for general and special local education grants, between the Ministry of Education, Metropolitan Office of Education, and vocational high schools. The Ministry of Education’s local education financial policies regarding vocational education and the municipal and provincial education offices’ fiscal year (FY) 2020 budget (including that for local vocational secondary education) were reviewed. (2) This study used vocational high school accounts data to analyze the FY 2015–2019 revenues and expenditures. Specifically, an in-depth analysis of the basic funding, targeted funding, and external resources (such as state subsidies and other public transfer revenues) for vocational high schools was performed. This included a content analysis of the FY 2019 budget bills for these schools. (3) The results informed the development of the proposed policies for the expansion and efficiency of vocational high schools.
1. Financial Structure of Vocational High Schools
The main features of the fiscal year (FY) 2015–2019 settlements of vocational high school accounting are summarized as follows:
Based on the settlement of revenues and expenditures, the total financial need of vocational high schools has tended to increase steadily every year. The FY 2015–2019 revenue accounts for the public Meister high schools showed an average increase of 14.7%, and those for the private specialized high schools showed an average increase of 5.6%. An analysis of the revenue and expenditure structures of the 10 schools with the highest average growth rates in FY 2015–2019 indicated that a substantial amount of the targeted funding was provided at a specific time. Some schools received a great deal of budget support for the Industry–Academic Partnership Apprenticeship projects. Obtaining most of the revenue at a specific time could lead to an increase in the amount of carryover revenue for the next year. The reason might be the multi-year duration of the targeted projects, including changes in school type.
The calculation of the expenditure settlement per public vocational high school, class, and student by region revealed an increase in almost all regions in FY 2015–2019. This was especially the case in the Gyeongsangbuk-do and Gyeongsangnam-do Meister high school expenditure settlements, which increased very rapidly. This was attributed to policy factors, such as the designation of a new Meister high school. Most of the revenue sources for the public and private vocational high schools were the revenue transfer accounts under the education budget. For FY 2019, the proportions of total revenue
settlements were 64.5% of public Meister High School, 63.3% of public specialized High School, 72.1%
of private Meister High School, and 73.3% of private specialized High School.
Converting the revenue from the specialized and Meister high schools to the amount per student revealed the following: (1) a steady increase in the special revenue transfer account per student, regardless of school type (a 29.9% increase at public specialized high schools in FY 2015–2019); (2) a decrease in the local government transfer revenues from local and private high schools to the public and private Meister high schools; (3) the irregular annual increases and decreases in the central government and other public transfer revenues; and (4) an increase in carryovers, especially in FY 2017–2019. Dividing the major revenues per student by region indicated the following: (1) The basic school funding transfer revenues increased in almost all regions (average > 20%; e.g., Busan, Gwangju, Gangwon, and Gyeongnam). (2) The targeted funding transfer revenues also increased sharply in all regions. (3) The growth in national subsidies was not stable in each region because of the nature of the resources. (4) There was a small increase in beneficiary-bearing income.
In the case of the settlement-of-expenditures-by-policy project, besides that for human resource management, the largest portion of the expenditures in the specialized and Meister high schools was the narrowing of the education differential. As of FY 2019, the basic education activities, which are the expenses for regular curriculum operations and teaching and learning activities, were 29.4% for public Meister high schools and 16.9% for public specialized high schools. The FY 2015–2019 changes in the expenditure settlement by policy project indicated continued growth, especially in student welfare, narrowing of the education differential, basic education activities, and selective education activities.
However, the difference between the Meister and specialized high schools and between the public and private schools in basic and selective educational activities funding was maintained over the past five years.
2. Key Features of Basic and Targeted School Funding
a. Basic School Funding
The basic funding for public Meister and specialized high schools steadily increased in FY 2015–2019 (₩3.9 million for public Meister high schools, ₩2.6 million for public specialized high schools, and
₩2.0 million for public general high schools in FY 2019). The increase in basic school funding seems to be the result of changes, such as the overall expansion of the education budget and the issuance of general grants for school and curriculum operations by applying 100% of the 2018 standard education expenses.
However, the percentage of basic funding for the transfer revenues of vocational high schools is on the decline (Meister high schools, 46.8% in 2015 to 34.8% in 2019; specialized high schools, 38.0% in 2015 to 30.2% in 2019). In addition, when the standard education expense calculation was applied, the percentage of basic school funding for vocational high schools was only 59.7% of that for the Meister high schools and 34.9% of that for the specialized high schools in FY 2019.
b. Targeted Funding
The characteristics of the targeted funding for the public vocational high schools can be summarized as follows: The total targeted funding transfer revenues increased from ₩333,570 million in 2015 to
₩581,977 million, and the percentage increased from 60.4% in 2015 to 69.3% in 2019, up 8.9% over the past five years. Thus, although the total amount of targeted funding increased, there was only a relatively small increase in basic school funding. In FY 2019, the public vocational high schools in Jeju received the highest percentage, 82.3%, of the targeted funding, followed by the schools in Jeon-nam and Seoul, which received 80.0% and 75.0%, respectively.
Since 2017, the number of schools receiving national subsidies, a typical targeted funding resource, has increased sharply. In 2017, 348 schools, or 59.8% of all vocational high schools, received national subsidies; however, 377, or 65.3 percent of 577 schools, received them in 2019. This seems to be the result of a change in the Ministry of Small and Medium-Sized Enterprises and Venture Business’s procedures for providing financial support to the specialized high schools. An analysis of the FY 2019 school revenue budget bills to identify the status of ministry subsidies revealed that 33 vocational high school projects were supported by 16 ministries.
In the case of local government transfer revenues, the percentage of school meal support has been increasing since 2018–2019, and the percentage of support in other areas has been decreasing. As of 2019, the specialized high schools had received a higher proportion of the education environment improvement funding than the Meister high schools, which had received the highest percentage of curriculum support.
More schools were receiving private transfer revenues from the public institutions than from the national subsidies. In 2019, 65.3% of the schools received national subsidies, and 90.5% received private transfers.
An analysis of the 2019 revenue budget bills for each school to determine the private transfer revenues of the vocational high schools indicated that approximately 53.5% of the private transfers were related to the industrial–academic collaboration apprenticeship schools.
3. Conclusions
Efforts have recently been made to increase education funding, and the financial support for vocational secondary education, including the specialized and Meister high schools, has continued to increase.
Nevertheless, vocational schools have complained of insufficient funds. Despite the trend of devoting greater financial resources to vocational high schools, the increase in basic school funding, especially for specialized high schools, was not significant. Accordingly, on the basis of the results of this study, the following policy measures are proposed:
First, the basic school funding for vocational high schools needs to be optimized. Each city and province should review and modify the allocation criteria. In particular, the characteristics of vocational high schools must be considered in the adjustment of the criteria for allocating basic school funding following the revision of the standard education costs.
Second, the financial operations in vocational high schools should be monitored more closely. Thus, the networks in the Ministry of Education, municipal and provincial education offices, and related agencies
must be strengthened, and the detailed data must be systematically collected and maintained. Specifically, there is a need to develop data that consider the characteristics of vocational high schools. Efforts must be made to systematize vocational secondary education.
Third, the funding for vocational education should be increased. The vocational high schools should be operated in close connection with the regional authorities. In fact, many vocational high school graduates are active in the regions. The financial support from the local governments does not appear to be sufficient or sustained. Measures to increase funding for vocational high schools can be discussed;
however, the role of the local governments should be paramount. The government must also continue to consider new approaches to expanding funding.
Fourth, future-oriented vocational education policies and approaches to securing and providing funding should be developed.
