Mariel Grazella, Jakarta – The delays schools have endured in receiving School Operational Assistance (BOS) funds that were prompted by changes in funding mechanisms have pushed schools to take out loans to stay open, a study by the World Bank revealed on Tuesday.

BOS funds were previously channeled directly to schools from the Finance Ministry through the provincial education office. However, under the new mechanism that was introduced in 2011, the Finance Ministry must channel funds through the district finance office and then the district education office.

According to World Bank Indonesia Operations Officer Nur Hidayat, the impact of the disbursement delays includes a lack of predictable funds to finance school operational expenditures needed for learning activities.

The delays also caused administrative staff and temporary teachers to be let go. "There have been cuts and suspensions of extracurricular activities as well," he said during a meeting with legislators.

He added that schools were forced to take out loans to continue operating, with five schools resorting to loan sharks and 18 schools borrowing from student savings to finance their activities. "We cannot tell what the effect borrowing will have on the schools," he said.