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Now Delhi private schools to be audited to check if fee hikes are justified
Continued parent activism and the adverse audit report of 9 Gurgaon schools on fee hikes prompted Delhi Edu Minster Manish Sisodia to hire close to 500 CAs to audit Delhi’s 200 private schools seeking answers for fee hike.
Delhi’s deputy CM and education minister Manish Sisodia has begun hiring a small legion of chartered accountants (CAs), at least 450 or 500 of them, to audit and verify if the fee hikes by 2,700 Delhi private schools are in line with rising expenditure.
While the process of auditing itself is pretty obtrusive, Sisodia is clear that he does not want to regulate schools, just ensure that fee hikes are justified. Private schools are required to submit their proposed fee increases and expenditure statements for 2016 to his ministry. The audit reports generated by the CAs will be made public.
"Transparency is the only key,” said Sisodia. “We will make it [audits] public, so that parents can see if a school is paying teachers well, they will charge high fees. My job is to verify if schools are paying teachers well. We will put it in the public domain.”
This seems to be the culmination of months of acerbic tussle between private schools and parents over high fees. Many instances have ended with audits and court cases. In fact, this war between parents and schools is just not limited to the NCR it has spread uniformly in the country with cases being reported from Mumbai, Hyderabad and Bangalore.
Schools on their part clearly say that this unrest is typical of the emerging middle class, which wants the best for its children but is unwilling to pay for it.
Last year, a similar stand-off between schools and parents resulted in Gurgaon divisional commissioner D Suresh ordering an audit of 9 private schools in Gurgaon by S M Saini & Associates. Though the audit report hasn’t been officially released, however, Suresh revealed that it had found that 7 schools were guilty of “unjustified fees hikes”.
2 Pathways schools in Gurgaon are among the ones that fell afoul of the auditor, Suresh declined to give further details of the audit.
When contacted, Prabhat Jain, owner of the upmarket Pathways schools, defended his position saying that his schools never raised fees beyond 7-10% annually.
“The current activism around fee hikes is quite mindless and is highly motivated by petty personal interest and political gains,” said Jain. “Audits are being carried out to simply determine excess of income over expenditure without analysing and determining depreciation and interest costs and heavy cash flow outflow required around loan repayment obligations, need to continually upgrade facilities, building corpus and for carrying out expansion to name a few.”
The root of this entire fiasco actually lies in the complex set of rules that govern the education sector in India. According to some, these rules compel opacity in the way private schools function as they have to showcase themselves as charitable trusts or societies rather than for-profit businesses. This lack of transparency and perceived arbitrariness of fees has prompted accusations by parents that schools are hiking fees by as much as 100% 200% annually.
The reason why the government has been forced to intervene in this matter is a never before activism staged by parents and the unchecked mushrooming of private schools across the country. This unprecedented growth of private schools is also due to the widely-held perception that government schools offer low-quality education, without acknowledging that government schools deal with first-generation learners.
An Ernst & Young report in 2014 disclosed that there are 99.8 million students in private schools in India, compared to 5.16 million in the US, and 0.5 million in the UK. In fact, private schools are becoming dominant in rural areas as apparent by the figures thrown up by the Annual Status of Education (ASER) reports. While 18.7% students in the 6-14 age group were enrolled in private schools in rural areas in 2006, this rose to 25.6% by 2011.
As private schools are proliferating, there is a growing debate over whether they should be for-profit or not. Governments would like the schools to be free of the desire to make profits.
“If you desire to be a profit-making business person, go to any other business,” says Sisodia. “Anyone who is pumping in money in education with the expectation that this is a profit-making business because we are living in a free market should go somewhere else because education is not a profit-making business – neither accepted by society, nor by law.”
The deputy CMs views echo various Supreme Court rulings over the years, where the apex judiciary authority has also viewed profiteering from education as undesirable but profits are permissible as long as they are not excessive.
“The major operating cost of all schools is staff salaries that go up on an average by 12% to 15% every year,” said Jain of Pathways. “This is necessary to attract bright people into the teaching profession and to ensure that they do not feel disadvantaged by having chosen teaching over other career options.”