promote reading. Please refer to EDB Circular No. 21/2019 for details.
11. EDB will announce the updated subsidy rates of the aforesaid grants in the related annual circular memorandum. The teachers’ salary portion of the above subsidies / grants for each school year will be adjusted according to the weighted average of civil service pay adjustment rates every year.
4.1.1.2 Disbursement of subsidies
1. Detailed arrangements for disbursement of subsidies are as follows:
a. The basic HD unit subsidy, additional subsidy for WD and LWD services and tide-over grant will be disbursed on a monthly basis based on the actual enrolment of eligible students. Given the diversity in the KG sector, KGs may not start a new school year in September. Disbursement of the funding will tie in with the school year arrangements of individual Scheme-KGs.
b. Rental subsidy will be disbursed on a monthly basis in the relevant school year. As calculation of the subsidy involves student enrolment, the “provisional amount of rental subsidy” from August or September to December will be released on the basis of the projected enrolment as of September in KG section, CCC section and/or non-local stream (enrolment information provided by KGs concerned through the “Rental Subsidy Scheme System”). Under normal circumstances, upon verification of the actual enrolment and ratio of eligible students, EDB will calculate the amount of
“confirmed rental subsidy” for the whole school year, and will disburse such amount of subsidy in January and subsequent months of the school year. Underpayment of
rental subsidy for the period between August/September to December will be settled in January of the following year. For overpayment of rental subsidy, EDB will deduct the amount from the subsidy to be disbursed subsequently or demand KG’s repayment. Please refer to the related annual EDB circular memorandum for the arrangements for new tenancy agreements and those for each school year.
c. The premises maintenance grant will be disbursed in two instalments, with the first instalment disbursed in August or September and the second instalment in April of the next year. The provisional amount of the first instalment of the grant will be released on the basis of the tentative number of eligible students to be reported in June. Adjustments will be made in the subsequent months if necessary upon verification of actual enrolment of eligible students as of September. If a Scheme-KG becomes eligible after the commencement month of the school year, subsidy will be calculated starting from the eligible month on a pro rata basis (full subsidy is equivalent to the grant for 12 months). Please refer to the related annual EDB circular memorandum for the arrangements for each school year.
d. Scheme-KGs should pay their rates and Government rent on or before the due date.
Claims for reimbursement from EDB can only be made after full settlement of the required payment. Please refer to EDB Circular No. 5/2017 for details about reimbursement of rates and Government rent.
e. The grant for a cook will be disbursed in two instalments, with the first instalment disbursed in August or September and the second instalment in April of the next year.
If a Scheme-KG becomes eligible after the commencement month of the school year, subsidy will be calculated starting from the eligible month on a pro rata basis (full subsidy is equivalent to the grant for 12 months). Similarly, should a Scheme-KG approved to receive the grant subsequently become ineligible for the grant after the commencement of the school year (for instance, all eligible students in the WD/LWD classes have left the KG), the grant for the school year will be adjusted on a pro rata basis. To allow time and flexibility to make necessary staff deployment / arrangement, this will only apply if the Scheme-KG becomes ineligible for a continuous period of one calendar month or more. Please refer to the related annual EDB circular memorandum for the arrangements for each school year.
f. The grant for support to NCS students will be disbursed in two instalments, with the first instalment disbursed in August or September and the second instalment in April of the following year. The grant rates for the two instalments are calculated based on the respective tier of grant the KG is entitled to in the specified months of the school year. For all KGs (irrespective of the commencement month of a school year), the tiered grant for the first instalment is determined according to the number of eligible NCS students admitted as at the specified date in mid-September (i.e. the
reference date of the Student Enrolment Survey for the respective school year). The tiered grant for the second instalment is determined according to the number of eligible NCS students admitted in mid-April. If the tier for the two instalments varies, the grant rate for the higher tier will be taken for the second instalment. The second instalment of the grant will not be disbursed to a KG if the number of NCS students drops to zero in April. Besides, if a KG becomes eligible for the grant in October or thereafter, the tier of grant will be determined according to its number of NCS students admitted as at the middle of that month, and the grant rate will be calculated on a pro rata basis starting from the eligible month (full subsidy is equivalent to the grant for 12 months). Please refer to EDB Circular No.14/2019 for details.
g. The supply teacher grant is disbursed to KGs on a reimbursement basis. All applications should reach EDB before 31 August of the school year concerned. For details about the application procedures, please refer to EDB Circular No. 8/2018.
The relevant application form can be downloaded from the EDB webpage.
h. The staff relief grant for staff taking paid maternity leave will be disbursed to KGs on a reimbursement basis. Scheme-KGs may apply from EDB for reimbursement of the expenses for employing substitute staff for eligible staff taking paid maternity leave. Please refer to EDB Circular No.17/2018 for details.
2. Should there be malpractices or non-compliance of the terms and conditions (including the requirement to accept any adjustment made by EDB to the approved school fee in consideration of the amount of Government subsidy utilised under the Scheme, meet the requirements in TP ratio, teachers’ qualifications and remuneration, transparency in governance and financial management, etc. as specified in the Appendices of EDB Circular No. 7/2016 and circulars / guidelines issued by EDB from time to time), and failure to rectify the irregularities with prior notice and reasonable time allowed for remedial action, EDB will take actions, including the issuing of warning letters and revocation of its eligibility under the Scheme. For such cases, any subsidy to the KG under the Scheme would cease and the funding released would be clawed back, as appropriate.
4.1.1.3 Surplus or deficit of subsidies
1. Scheme-KGs shall observe the reserve ceilings and claw-back arrangements of each subsidy as specified by EDB.
2. 60% of the basic unit subsidy (including basic HD unit subsidy and additional subsidy for WD and LWD services) is regarded as the salary portion and must be used on teaching staff salaries and related expenses (such as mandatory provident fund and long service payment).
KGs may deploy any portion of the remaining 40% for teaching staff salaries and related expenses, but not vice versa. To encourage schools’ optimal use of the subsidy on teaching staff salary, accumulated surplus in the salary portion exceeding the reserve ceiling would be clawed back.
3. Subsidies provided to cater for the needs of individual KGs, such as rental subsidy, premises maintenance grant, grant for a cook and grant for support to NCS students, should be used according to their respective ambits. Cross-subsidisation among different subsidies and uses other than those specified are not allowed.
4. Reserve ceiling: Scheme-KGs are encouraged to utilise the grants fully to offer quality KG education. Hence, substantial surplus in this regard is not expected. Scheme-KGs should avoid deficit and should be prudent in the use of government subsidies / grants and ensure that expenditure incurred is reasonable and necessary. As for surplus, KGs may need to retain some surplus to meet contingencies and make necessary adjustments in the strategies in manpower deployment and support to students. Under no circumstances will Scheme-KGs be allowed to use Government subsidies and school funds for speculative investment, and they should comply with EDB Circular No. 14/2015 “The Choice of Bank Counterparties in Investment” when handling surplus. On condition that the KGs are able to offer quality HD services for free and maintain fees for WD/LWD services at a reasonable fee level, Scheme-KGs are allowed to accumulate a surplus up to one-year provision of the respective grants (except rental subsidy, reimbursement of rates and Government rent, supply teacher grant, staff relief grant for staff taking paid maternity leave, and the premises maintenance grant). Specifically,
a. the grants relating to teaching staff salary and related expenses (such as mandatory provident fund and long service payment) cover the total of the relevant portion (set at 60%) of the basic unit subsidy (including basic HD unit subsidy and additional subsidy for WD and LWD services) and the tide-over grant. The reserve ceiling is the current year provision of the above subsidies;
b. the surplus of the remaining 40% portion of the basic unit subsidy (including basic HD unit subsidy and additional subsidy for WD and LWD services) will be capped at the current year provision of the relevant portion.
5. The arrangements for the ceiling of accumulated surplus of various subsidies under the Scheme are set out below:
a. Rental Subsidy Scheme: In principle, there should be no surplus for rental subsidy.
Hence, the arrangement for accumulating subsidy surplus is not applicable.
b. Rates and Government rent: Since rates and Government rent are disbursed on a
reimbursement basis, the arrangement for accumulating subsidy surplus is not applicable.
c. Premises maintenance grant: Scheme-KGs are allowed to accumulate a surplus up to 500% of the current year provision of the grant. If, in a particular year, the accumulated surplus of the grant reaches 500% of the current year provision, EDB will suspend the disbursement of grant and claw back the excessive surplus of that year according to the annual audited accounts for the same year. Any grant further disbursed subsequent to that year will also be clawed back. After suspending the disbursement of premises maintenance grant, EDB will continue to calculate a
‘notional’ premises maintenance grant in each school year based on the relevant enrolments and grant rate. The disbursement of grant from EDB will only resume when the accumulated surplus in the annual audited accounts falls below 100% of the ‘notional’ premises maintenance grant for the accounting year. The ‘notional’
premises maintenance grant calculated during the period of suspension is only for determination of the timing for resumption of the disbursement of premises maintenance grant to the KG, i.e. EDB is not liable to any payment of the ‘notional’
grant so calculated.
d. Grant for a cook: Scheme-KGs are allowed to accumulate a surplus up to the current year provision of the grant. EDB will claw back excessive surplus of a year based on the annual audited accounts of the same year.
e. Grant for support to NCS students: Scheme-KGs are allowed to accumulate a surplus up to the current year provision of the grant. EDB will claw back excessive surplus based on the annual audited accounts.
f. Tide-over grant: The reserve ceiling of the tide-over grant is calculated on the basis of the total of grants relating to teaching staff salary and related expenses, that is the total of tide-over grant and the salary portion (set at 60%) of the basic unit subsidy (including basic HD unit subsidy and additional subsidy for WD and LWD services).
The reserve ceiling is the total of the current year provision of these two subsidies.
EDB will claw back the surplus of the grant based on the annual audited accounts.
g. Supply teacher grant: Since the supply teacher grant is disbursed to KGs on a reimbursement basis, the arrangement for accumulating subsidy surplus is not applicable.
h. Staff relief grant for staff taking paid maternity leave: Since the staff relief grant for staff taking paid maternity leave is disbursed to KGs on a reimbursement basis, the arrangement for accumulating subsidy surplus is not applicable.
6. In calculating the accumulated surplus of various subsidies, the current year provision for
a subsidy refers to the actual disbursements of the subsidy received in respect of the respective accounting year, including the adjustment to disbursements.
7. KGs should apportion the related portion of basic unit subsidy (i.e. 60%) and tide-over grant, the remaining 40% of the basic unit subsidy and premises maintenance grant by HD and WD/LWD sessions for calculation of the reserve ceilings to ensure no cross subsidisation of HD and WD/LWD sessions. No apportionment is required for the grant for support to NCS students, which is disbursed on a school basis. Grant for a cook is only applicable to WD/LWD sessions.
8. Surplus / deficit for various subsidies shall be calculated separately. Upon accumulation to the above prescribed level, EDB reserves the right to make any adjustment in the subsidies payable to the KG. For claw-back of any unspent government subsidies based on the audited annual accounts, EDB will deduct the exceeded amount of accumulated subsidy surplus from the next payment of subsidies payable to the Scheme-KG or demand KG’s repayment directly.
9. For basic unit subsidy, Scheme-KGs may deploy the surplus (if any) of the portion of the basic unit subsidy for other operating expenses (i.e. 40% of the basic unit subsidy) as a supplement to teaching staff salary and other subsidies such as premises maintenance grant / rental subsidy. The amount of supplement is limited to the deficit of teaching staff salary and other subsidies of the current year. If there is a deficit in the portion of the basic unit subsidy for other operating expenses or its surplus cannot fully cover the deficit of other designated subsidy accounts under “KG Scheme Funds”, the difference shall be borne by school funds.
10. For other subsidies disbursed under the Scheme, if Scheme-KGs cover the deficit of current year by surplus from the 40% portion of the basic unit subsidy, the amount of basic unit subsidy deployed to cover the deficit should be limited to the amount of the deficit of respective subsidies of the same year. The requirements for handling deficit of the subsidies under the Scheme are as follows:
a. Rental Subsidy Scheme (RSS): The rental subsidy to some KGs may not cover their full rental expenditure because of (i) low fill-up rate; (ii) “dual” caps; and/or (iii) the rental expenditure exceeding the market rent as assessed by RVD. The difference between the actual rental expenditure and the rental subsidy under (i) and (ii) can be charged to the subsidies under the Scheme and/or school funds. For (iii), the rental expenditure exceeding the market rent as assessed by RVD, which will be made known to KGs in due course, should not be charged to the subsidies under the Scheme, nor will be recognised for approving the school fee. It should be borne by school funds (except school fees).
b. Rates and Government rent: Since rates and Government rent are disbursed on a reimbursement basis, there should be no deficit.
c. Premises maintenance grant: If the expenditure of large-scale maintenance works cannot be fully covered by the premises maintenance grant, the deficit should be borne by at least one of the following two funds: (1) surplus of 40% (i.e. other than teaching staff salary and related expenses) basic unit subsidy (including basic HD unit subsidy and additional subsidy for WD and LWD services), if any, and/or (2) school funds. If the surplus of the 40% portion of the basic unit subsidy (if any) is insufficient to cover the deficit, the deficit balance should be borne by school funds.
The expenditure should be spread over years as major repairs and maintenance for the purpose of fee revision application to reduce its effect on the calculation of revised fees. However, in terms of accounting records, the expenditure of repair and maintenance works is not classified as fixed assets. Apportionment of expenditure over years is hence not applicable and the expenditure amount should be recorded in full.
d. Grant for a cook: Any deficit should be borne firstly by school’s income from meal charges. If surplus of such income (if any) is insufficient to cover the deficit, the deficit balance should be borne by school funds.
e. Grant for support to NCS students: Should there be any deficit, the amount should be covered by the surplus (if any) of the 40% portion of the basic unit subsidy (i.e.
the portion not relating to teaching staff salary and related expenses). Any shortfall should be borne by school funds.
f. Tide-over grant: This grant serves as additional financial support for KGs to defray their expenses on teaching staff salary. If there is still a shortfall in covering the teaching staff salary after deploying the grant, KGs may defray the salary expenses by the surplus (if any) of the 40% portion of the basic unit subsidy (i.e. the portion not relating to teaching staff salary and related expenses). If there is a deficit in the portion of the basic unit subsidy for other operating expenses or its surplus cannot fully cover the deficit, the difference shall be borne by school funds.
g. Supply teacher grant: Since the supply teacher grant is disbursed to KGs on a reimbursement basis, there should be no deficit.
h. Staff relief grant for staff taking paid maternity leave: Since the staff relief grant for staff taking paid maternity leave is disbursed to KGs on a reimbursement basis, there should be no deficit.
11. There are several grants paid to KGs under the Scheme according to the actual expenses, such as staff relief grant for staff taking paid maternity leave and supply teacher grant.
KGs should list out the income and expenditure for such grants in the annual audited
accounts. Since these grants are disbursed on a reimbursement basis, there will not be any surplus for such grants. However, if a KG incurred relevant expenditure that meet the requirement of the grant in the current accounting period but the reimbursements are received in the subsequent accounting period, the temporary deficit for these accounts will be brought forward to the next accounting period pending reimbursement and need not be made good in the current accounting period.
12. For detailed information of the surplus / deficits of subsidies and the claw-back of subsidies / grants, please refer to “Questions & answers on financial matters (batch 3)”.
4.1.2 School funds 4.1.2.1 School fees
1. KGs are required to comply with the relevant Education Regulations and circulars issued by EDB regarding collection of school fees and other fees. Prior written approval must be sought from EDB for any fee adjustment or new charges.
2. In principle, Government subsidy is sufficient for Scheme-KGs to provide quality HD services; hence KGs should not charge school fees for HD services. Scheme-KGs should effectively deploy resources (including subsidies under the Scheme and school funds) to enhance the quality of services, such as better TP ratio, while they offer HD free KG education. For any applications for collection of school fees, KGs concerned should provide financial budget with strong justifications and supporting information to prove that the expenditures are essential (e.g. expenses on rent for KG premises not fully covered by rental subsidy). EDB will consider the applications on a case-by-case basis. For KGs relatively with low student intake, they are obliged to appoint and deploy their staff properly to ensure the quality of KG education they offer, including meeting the required TP ratio of 1:11 under the Scheme. Notwithstanding that, Scheme-KGs with special circumstances may approach EDB for special consideration on a case-by-case basis.
3. As for WD/LWD services premised on the principle of co-payment between the Government and parents, parents have to pay part of the additional costs.
Notwithstanding this, with the additional subsidy from the Government, the school fees should be at a low level. Applications for school fee revisions should be reasonable and strongly justified. In principle, only expenses directly related to teaching and learning, school operation and maintenance of WD/LWD services would be considered. For instance, in light of the longer operating hours, LWD services may need additional teachers beyond the TP ratio of 1:11, more senior teachers, adjustment for the ranking of the
principal, more janitor staff to help in nap arrangements for the children, etc., the expenditure so incurred may be recognised for school fee assessment. EDB will consider the KGs’ expenditure on individual merits, for example, whether the KG’s increase in manpower is based on existing staffing arrangements, whether employment of additional teachers is driven by school’s needs and under the premise of alleviating parents’ burden, and whether KGs will make special staffing arrangement for extended school hours during which not all students are present (e.g. fewer staff are required during the periods of 8 am to 9 am and 4 pm to 6 pm of school days and on Saturdays).
4. In principle, school fees and other fees collected should be used to cover the expenditure items directly related to teaching and learning, school operation and maintenance of education services regardless of HD, WD and LWD services. In using resources from school fees and other fees, Scheme-KGs should be prudent and should ensure that expenditure incurred is reasonable, necessary and in line with the above-mentioned principle.
5. Only if the school supervisor is assigned to perform specific duties (not those general duties as a school supervisor) in the KG/KG-cum-CCC, the remuneration will be considered in calculation of the school fees. Please note that EDB will not approve any proposed specific duties that should normally be performed by the principal(s). In addition, for the duties which are services normally procured through procurement procedures, proper procurement procedures should be followed.
6. Under the Scheme, EDB will also set school fee ceilings with reference to the amount of basic unit subsidy for participating schools. Please refer to the related annual EDB circular memorandum.
7. The surplus of school fees, if any, should be retained in the “School Funds” accounts and should not be transferred to any person or other organisations (including SSBs / operators) in whatever form (including donation and gifts).
4.1.2.2 Application fee and registration fee
1. KGs should observe EDB Circular No. 6/2017 “Collection of Application Fee and Registration Fee, Admission of Students and Provision of Information by Kindergartens”
when collecting application fee and registration fee. Specifically, the ceiling for application fee is $40, and the ceilings for registration fee are $970 and $1570 for HD session and WD session respectively. Under the Scheme, participating KGs are not permitted to collect application fee and registration fee exceeding the above approved