## STATISTICAL ANALYSIS ON EDUCATION TRUST FUND ALLOCATION TO TERTIARY INSTITUTION IN SIX GEO-POLITICAL ZONES OF NIGERIA (1999-2007)

ABSTRACT
In this project entitled statistical analysis on education trust fund allocation to tertiary institutions in six geo-political zones of Nigeria, the average allocation to zones, method of distributions, extraction of principal components, classification of the components into factors and to test if there is any significant difference in the allocation among the zones was carried out using principal components analysis, factor analysis, normality test just to mention but a few. The average allocation to all the zones within the period under review was #14,605,429,76. The allocation to zones was normally distributed indicating unbiasedness in the allocations. University allocation is the principal factor component in the ETF allocation among the institutions revealing high contribution of university with 0.201 in the first component, followed by monotechnics, polytechnics and colleges of education. With little difference in the allocations among polytechnics, monotechnics and colleges of education, they were grouped into one factor and university in another factor. Based on the results obtained; no zone is more favored and their distribution is unbiased.

CHAPTER ONE
1.0      INTRODUCTION
1.1      BACKGROUND OF STUDY
In Principal Components Analysis (PCA) and Factor Analysis (FA) one wishes to extract from a set of P variables a reduced set of M components or factors that accounts for most of the variance in a P variables in other words, we wish to reduce a set of P variables to a set of M underlying super ordinate dimensions.

These underlying factors are inferred from the correlations among the P variables. Each factor is estimated as a weighted sum of the P variables. The factor is thus;

F1 = W1X1 + Wi2X2 + W1pXp+ K.

One may also express each of the P variables as a linear combination of the M factors,

Xj = Aij F1 + A2j F2 + Amj Fm + k+ Uj

Where Uj is the variance that is unique to variable j, variance that cannot be explained by any of the common factors. Principal component analysis is a variable reduction procedure which provides guidelines regarding the necessary sample size and number of items per component. It also shows how to determine the number of components to retain, interpret the rotated solution, create factor scores and summarize the results.

It is appropriate when you have obtained measures on a number of observed variables and wish to develop a smaller number of artificial variables called Principal Components that will account for most of the variance in the observed variables. The principal components may then be used as predictor variables in subsequent analysis.

Principal component is defined as a linear combination of optimally weighted observed variables. The “linear combination” here refers to the fact that scores on a component are created by adding together scores on the observed variables being analyzed and “optimally weighted” refers to the fact that the observed variables are weighted in such a way that the resulting components account for a maximal amount of variance in the data set.

Factor analysis is a mathematical tool which can be used to examine a wide range of data sets. It is the most familiar multivariate procedure used in the behavioral sciences; it includes both component analysis and common factor analysis. In factor analysis, you need only the correlation or covariance matrix not the actual scores. The purpose of factor is to discover simple patterns in the patterns of relationship among the variables. In particular, it seeks to discover if the observed variable can be explained largely or entirely in terms of a much smaller number of variable called factors.

Onyeagu (2003) explained the difference between factor analysis and principal component analysis. Factor analysis is covariance (or correlation) oriented. In principal component analysis, all components are needed to produce an inter-correlation (covariance) exactly. In factor analysis, a few factors will reproduce the inter-correlations (covariance) exactly.

Wang (2007) differentiate the principal component analysis and factor analysis as in principal component analysis the major objective is to select a number of component that will express as much of the total variance in the data as possible.

However, the factors formed in the factor analysis are generated to identify the latent variables that are contributing to the common variance in the data. A factor analysis attempts to exclude unique variance from the analysis; whereas a principal component analysis does not differentiate common and unique variance. PCA analyzes variance while FA analyses covariance.

The PCA and FA have some similarities such as their measurement scale is interval or ratio level, linear relationship between observed variables, normal distribution for each observed variables. Each pair of observed variables has a bivariate normal distribution and lastly PCA and FA are both variable reduction techniques. If communalities are large, close to 1.00, results could be similar.

1.2 SOME FACTS ABOUT NIGERIA EDUCATION
The literacy and educational characteristic of population aged 6 years and above were enumerated in 1991 population census. The literacy was 60% for males and 40% for females. The literacy level in the country appears to have improved over years, while the sex differential on literacy among persons in the age group 35-39 was almost twice as high for male (68.3%) and female (35.8%). In contrast, the age group 10-14, literacy rate among male (76.6%) is higher than the corresponding rates for females (74.7%) by barely 2%. This pattern did not vary among the States, which indicates that there was increase awareness in all the States, that education of the female child is desirable as that of a male child even for heads of households.

Among the population aged 15 years and above literacy rate was found to be 44.3% at the national level. Adult literacy rate was lowest in Lagos State (19.8%) and River State (20.3%) and highest Yobe State (68.6%). Very high adult literacy rates were recorded also in Niger State (61.8%), Taraba (64.4%), Sokoto (64.5%), Kebbi (66.1%) and in all 46% have no education. Such high illiteracy rate has serious implication for schools, social and economic development. Similarly more males than females attained either primary, secondary or tertiary level of education and these situations may have resulted from long neglect of women’s education needs and lack of funds to our educational system.

The education trust fund (ETF) was established under Acts No7 of 1993 and amended by the act No 40 of 1998 with project management to improve the quality of education in

Nigeria. To enable the ETF achieve the above objective, Act No 7 of 1993 as amended imposes a two percent (2%) education tax on the assessable profit of all registered companies in Nigeria. The Federal Inland Revenue Service (FIRS) is empowered by the Act to access and collect the education tax. The fund administers the tax imposed by the Act, and disburses the amount to educational institution at Federal, State and Local Government levels. It also monitors the projects executed with the funds allocated to the beneficiaries for effective and efficient realization of mandate, implementation of its function and general organization of work, the fund is structured into two segments below:-

1.     The Board of Trustees, and

2.     The Secretariat.

The Board of Trustees
The funds are managed by eleven member board of trustees headed by Chief (Mrs.) Olutoyin Olakunri, OFR, with members drawn from the six geo-political zones of the country as well as representatives of the Federal Ministry of Education, Federal Ministry of Finance and Federal Inland

Revenue Service. The board of trustees has the following responsibilities as stated in the Acts:
Monitor and ensure collection of tax by the Federal Inland Revenues Service and ensure transfer of the collected funds; Disburse the tax to appropriate ministries responsible for collection of the tax; Receive requests, approve admitable project after due consideration; Ensure disbursement to various level and categories of education; Update the federal government on its activities and progress through annual audited reports; review Progress and Suggest improvement within the provision of the acts; Invest funds in appropriate and state securities.

The Secretariat
The secretariat is headed by the chief executive Secretary, who is the chief executive and accounting officer of the funds. Director and Heads of Department and unit, assist him in the day to day running of the offices of the fund. The departments are:

2.                  Finance and Account ;

3.                  Operation ;

4.                  Planning Research and Assessments;

5.                  The Specializations Units;

6.     Information and Communication Technology, Inter Audits;

7.                  Legal services and board secretariat servicom. Education Trust Fund has developed a culture of
accountability and transparency in its operations over the years. These qualities are very entrenched in all its policies and programmes in the areas of intervention in the sector. The Education Trust Fund in promoting the twin qualities of transparency and accountability ensures that education tax collection by the Federal Inland Revenue Services are monitored and reconciled periodically. The board also ensures that disbursement of funds to the beneficiary educational institutions are use for the restoration, rehabilitation and consolidation of education in the country.

Education Trust Funds intervention in educational sector in Nigeria covers Federal ministry of education, its agencies and parastatals, unity and technical schools. Thirty six States plus FCT Primary Education Boards, and thirty six States plus FCT ministries of education for secondary school education.
All National and State Libraries;

All Federal and State Universities;

All Federal and State Polytechnic, Monotechnics; All Federal and State Colleges of Education;
The main activities undertaken by Education Trust Funds includes:-

1.                  Liaising with Federal Inland Revenue Service to monitor the collection of education tax;
2.                  Providing pro-active support for education tax collection by federal Inland Revenue Service;

3.                  Embarking on periodic tax tour to mobilize education tax;

4.                  Embarking on joint reconciliation visit to area offices of the Federal Inland Revenue Services;
5.                  Receiving proposal on areas of intervention from beneficiaries;

6.                  Receiving proposal by professionals to assess their relevance to improving the quality of teaching and learning;

7.                  Organizing  periodic  workshops/seminars  across  the country to enable stakeholders and beneficiaries make input into future intervention policies.
The challenges before Education Trust Fund are as flows:-

1.                  Boasting the confident of stakeholders in funds by maintaining high standard of transparency as well as efficient and effective operations;

2.       Ability to enhance and boast teachers’ morale to such a high level and to positively rekindle interest in teaching and learning in Nigeria schools;

3.                  Ability to sufficiently sensitize and collaborate effectively with the Federal Inland Revenue Service to expand the funds revenue base;

4.                  Encouragement  of  information  centre  technology  to

enhance teaching and learning in Nigeria schools. However, Education Trust Fund has the following stated goals:

1.                  To continuously improve education tax revenue by ensuring that all such taxes are collected and made available to Education Trust Fund intervention.

2.                  To promote cutting edge technologies ideas and organization skills in education and ensure that projects are forward-looking as well as responding to present needs;

3.                  To ensure the prompt, effective and successful completion of intervention projects in accordance with the most pressing needs of beneficiary institution;

4.                  To form a viable and enduring partnership between the ETF and all bodies and institution interested in the qualitative improvement of education in Nigeria;

5.                  To create a cohesive and solid organization characterized by commitment principles, loyalty to organization and the nation, adequate capacity to accomplish set task with a learning structured cooperation among the level of the organization and within each levels, institutional periodic consultant among all levels and arms of the organization;

6.                  To manage education tax in a way that is most beneficial to the Nigeria people;

7.                  To deliver appropriate and adequate intervention programmes to sensitize various groups and individuals in the country.

1.3       STATEMENT OF PROBLEMS
The study sought to examines the series of questions related to Education Trust Fund funding to education. Is the funds normally distributed among the six geo-political zones? Is any zone more favored? These with some other questions about Education Trust Fund serve as the basis for which this research will be carried out.

1.4       PURPOSE OF THE STUDY
The purpose of this study is to examine how the Education Trust Fund disburses funds to tertiary institution among the six geo-political zones in Nigeria.

1.5       SIGNIFICANCE OF THE STUDY
This study is going to contribute significantly to educational development in Nigeria. It will help statisticians in understanding the mechanism of Educational Trust

Funds, funding to tertiary institution and its impact on educational development.
Last but not the least; it will create an interest among the new researchers to employ such techniques in their inter-disciplinary approach of research and literature review.

1.6       SCOPE OF THE STUDY
The study will consider only the Educational Trust Fund funding to Tertiary Institution in the six geo-political zones in Nigeria, from 1999-2007.

1.7       AIMS AND OBJECTIVES
The specific aims and objective of this study are as follows:-

1.                  To extract the first factor principal component between the tertiary institution under study;
2.                  To classify the components into factors;

3.                  To know if the distribution is normally distributed;

4.                  To know which of the zones is favored by this distribution;

5.                  To know the distribution of ETF allocation to Tertiary Institution in Nigeria.

1.8       TEST OF HYPOTHESIS
Ho: There is no significant difference in the allocation of ETF funding to tertiary institution in the six geo-political zones. Hi: There is a significant difference in the allocation of ETF funding to tertiary institution in the six geo-political zones.

1.9      OPERATION KEY WORDS
Communality – Denoted by h2. It is the proportion of the variance of an item that is accounted for by the common factors in a factor analysis.

The unique variance- of an item is given by 1− h2.

Eigen value - The standardized variance associated with a particular factor. The sum of the eigenvalues cannot exceed the number of items in the analysis, since each item contributes one to the sum of variances.

Eigen vector are weights in a linear transformation when computing principal components scores.

Factor: A linear combination of items (in a regression sense, where the total test score is the dependent variable and the items are the independent variables).

Principal Component- is a linear combination of observed variables that explain a maximal amount of variance in the data.

The factor loading expresses the correlation of the item with the factor.

The square of this factor loading indicates the proportion of variance shared by the item with the factor.
Scree plot: A plot of the obtained eigenvalue for each factor.

(A paper by Diana D.S on Principal component Analysis Vs Exploratory Factor Analysis.)

1.10 ABBREVIATIONS
P.A. - Principal Analysis

F.A. - Factor Analysis

C.O.E. - College of Education

Univer - University

Poly - Polytechnic

Mono - Monotechnic

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Item Type: Project Material  |  Size: 57 pages  |  Chapters: 1-5
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