Education investments made without long-term view

Toomas Mattson | 10/17/2013 | 10:34 AM

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TALLINN 17 October 2013 - The National Audit Office finds in its audit report that the Ministry of Education and Research has invested large amounts in improving the property of educational institutions although no clear school network plans or further property management principles have been established. This means that there is no certainty whether the improved properties are those that will be needed most in the future and whose maintenance can be guaranteed.

Remarkable amounts, which have mostly been received as foreign support, have been invested in educational and research institutions in recent years. Approximately 800 million euros has been invested in the buildings and equipment of educational and research institutions since 2008 via the Ministry of Education and Research alone. More than 70% of this amount was received from the European Union Structural Funds. The state has also planned to invest large amounts of money in the area of education and research in the new period of the EU Structural Funds (2014-2020).

The National Audit Office analysed how the Ministry of Education and Research has planned these investments and conducted the strategic management of property. The audit focused on state-owned general education schools and vocational educational institutions. Approximately 300 million euros has been invested in these schools since 2008, which has considerably improved the learning environment in many schools.

The Ministry of Education and Research is still reviewing the school network and making important decisions that will have an impact on the number and location of schools. For example, the division of duties of state and local authorities in offering education to special needs children is still under review, and it is unclear how the formation of state upper secondary schools is decided and how many of these there should be in the country.

The lack of a clear and agreed understanding of the kind of school network we need has led to a situation where money for investments has also been allocated for schoolhouses, whereby it is unclear whether they will be used in the future. For instance, the unfinished school complex in Vaeküla has been standing empty for years, yet Riigi Kinnisvara AS (State Real Estate Ltd.) invested ca. 1 million euros in it before construction work was stopped. In recent years, large amounts of money have also been invested in certain schoolhouses even though the decision to move the schools operating in them elsewhere had already been made (e.g. Raikküla School). In the case of vocational educational institutions, the state has emphasised that education must be equally accessible throughout the country (with a vocational education institution in every county), but the decrease in the number of students means that it may be necessary to change the existing network of vocational institutions after all. For example, Vana-Antsla Vocational School was supposed to receive money according to the investment plan, but it was decided to merge it with the Võru County Vocational Training Centre in 2012 soon after the investment decision was approved. Fortunately, no money had been allocated for renovation of the schoolhouse.

Director of Audit of the Performance Audit Department Tarmo Olgo admitted that investing in the property of educational institutions is necessary, but that these investments should be targeted better. “We know what the number of students will be like in the coming years and this means that not all schoolhouses will survive,” he said. “State and local authorities are also re-dividing functions in the provision of education, which has a significant impact on the school network. Making investment decisions like this requires a thorough analysis of whether we really need all of these schoolhouses. Unfortunately, the Ministry of Education and Research hasn’t always done that, which is why we find ourselves in a situation where we have a nicely renovated schoolhouse, but not enough students. It’s a pity that the least has been done for schoolhouses used by special needs children, although they are a part of society that needs more care, protection and attention than most others.”

The National Audit Office also found many things that could be improved in the way in which the Ministry of Education and Research manages the area of property. The lack of reliable data about the buildings of educational institutions is an important problem. The audit revealed that national registers – the State Property Register and the State Register of Construction Works – contain different data about the total area, age and purpose of buildings. The ministry also gathers information from other sources, but it is impossible to obtain an up-to-date and reliable overview of the buildings in its area of government. There is also no objective overview of the condition of a property as a whole, as no uniform methodology or scale has been used to evaluate this. The intensity of use of the buildings has not been systematically evaluated either. The standards that regulate the size of different types of schoolhouses are still being specified. All of this means that it was impossible for the National Audit Office to obtain reassurance that the money invested so far has gone into the buildings that needed it most in light of future requirements and that the amounts invested were sufficient.

When planning the investments, the Ministry of Education and Research has not required its agencies to submit long-term forecasts of property maintenance costs or prepared any itself. This is why there is no certainty about how well the renovated buildings will be able to be maintained in the future. The investments made in the property of educational institutions have not lead to a considerably increase in the property expenses of agencies so far, but the pressure for an increase is real due to rising energy prices and the amount of wear of the investments already made. This in turn puts pressure on the state budget.

It has still not been decided whether the state will remain the owner of the infrastructure of educational institutions and that the Ministry of Education and Research will be responsible for its management (by outsourcing the management service if necessary) or whether the buildings will be transferred to Riigi Kinnisvara AS and the state will rent the premises from the commercial undertaking.

Although all of the buildings were supposed to have been transferred to the public undertaking by the end of 2012 on the initiative of the Ministry of Finance and the implementation plan of the State Real Estate Strategy that was approved by the government to guarantee efficient management of property, the additional funds required to do so in the area of government of the Ministry of Education and Research have not been found. Deciding on the most suitable property management model has already taken years and this has led to a situation where schools have not had equal opportunities to maintain their property.

The Ministry of Education and Research has acknowledged the problems highlighted in the report and taken several steps to improve the situation. They have started developing school network plans, and standards concerning the area of educational buildings are being reviewed. The data in registers have already been streamlined and identifying necessary and unnecessary property has also been actively dealt with.

Background

The state had more than 1.7 million m2 of built-up areas as at August 2013. Approximately 40% (more than 693,000 m2) of this was managed by the Ministry of Education and Research, which made the ministry one of the biggest managers of built-up properties belonging to the state. The area of state-owned schools, upper secondary schools and vocational schools for special needs children, incl. rented premises, totals ca. 600,000 m2.

Toomas Mattson
Head of Communication Service, National Audit Office
+372 640 0777
+372 51 34 900

toomas.mattson@riigikontroll.ee
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  • Posted: 10/17/2013 10:34 AM
  • Last Update: 8/16/2015 12:20 AM
  • Last Review: 8/16/2015 12:20 AM

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