The objective of this study is to analyze the way in, which primary and secondary education is financed in Sri Lanka. The study will look at how funds flow from the state level down to the schools with the intention of understanding the way in which decisions are made regarding the allocation of funds for primary and secondary education. A detailed analysis of schools will also be carried out, with regard to the availability of physical facilities, teachers and other required equipment in order to understand the disparities that exist in the quality of education among schools. The concept of polarization and its impact will also be studied.