This study was designed to analyze the primary education Priority Action Program (PAP 2.1) in Cambodia. Weaknesses in Cambodia's public expenditure management system including the difficulty in channeling funds down to service providers have resulted in costly inefficiencies in improving social welfare outcomes. In response to these problems, in 2000 the Royal Government of Cambodia started the Priority Action Program (PAP). PAP education was launched in 10 provinces in 2000 and expanded to cover all provinces in 2001. The primary education Priority Action Program (PAP 2.1) provides for schools' operational budgets and accounts for over one quarter of the entire PAP budget in education. PAP 2.1 funds are to be used to support start-of-the-year operational costs as well as day-to-day school operations. PAP 2.1 funds are intended to cover small expenditures on basic teaching materials, sports, school environment improvements and other small spending items primary schools usually incur. The fixed grant component is expected to be disbursed first in any given budget year so as to allow schools to purchase teaching materials and carry out the school opening ceremony at the beginning of each school year (October). The main objective of this study is to analyze the impact of PAP 2.1 in terms of providing resources to Cambodian schools in a timely and predictable manner, making sure those resources are used as intended. In addition to issues of efficiency (resource flow and use), Cambodia PETS in Primary Education examines equity in the allocation of PAP 2.1. resources and the impact on student outcomes. Moreover, this study analyzed the flow and use of Chapter 11 funds in the regular budget system, and compared them with PAP 2.1 funds. Chapter 11 funds are intended for general operational and maintenance expenditure. The Cambodia Public Expenditure Tracking Survey in Primary Education is a complex survey involving the Provincial Treasuries (PT), Provincial Education Offices (PEOs), District Education Offices (DEOs), school directors, parents and students. The survey covered a random sample of 200 primary schools in 21 districts and 7 provinces. Also, randomly selected 20 Grade 4 students and 20 Grade 6 students were tested in numeracy and literacy skills.
