ANALYSIS OF THE MAIN EXPENDITURE AND STRUCTURAL COMPONENTS OF THE EDUCATION SYSTEM IN A REGIONAL CONTEXT

Abstract

Based on the results of the author`s previous research of the fundamental and main components of the education system, this study presents actual expenditure amounts by economic classification categories for a more detailed analysis of the relationship between total costs, costs per student and per school, the average number of students and the average number of schools, and the structure of costs in the system both as a whole and at the regional level. The paper compares two groups of municipalities with similar student numbers from a regional perspective: state-cities and municipalities from the rest of the country. This study aims to statistically analyze a large number of relevant 2800 records of real data and relevant legislation. We found that while per-student spending is lower in state-cities than in the other group, this advantage is quickly eroded by other factors such as inflation, significant reward and services expenditure position increase necessitating the use of other metrics (like average expenses per school) to analyse the situation more objectively. Moreover, analysis suggests that state-cities, despite its lower per student costs, need to review and revise their school expenditure, as overall expenditure has increased by 64.7% and its relation to the national average has significantly increased by 21.6 percentage points over the five-year period. The rest of Latvia`s municipalities managed to maintain total expenditure growth rates at only +27.3% and reduce the ratio of average expenditure per school to the national average by -8.5% percentage points over the same period. This study is a part of a continuous development of a resource management model in the education system, as a contribution for better governance of finance towards sustainability of education system.