Management and Financial Audit (MFA)
School Administration 3 Section
20 September 2016
Policy Background
Policy objectives of DSS:
enhancing parental choice
enriching our education system through increasing diversity in the school system
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SCHOOLS DSS
Policy Background (2)
Greater operational
flexibility Receive public
funding and may collect school fees
Accountable to the public
and various stakeholders
AUTONOMY ACCOUTABILITY
Policy Background (3)
DSS Schools
4Flexibility &
Diversity Regulatory oversight
Policy Background (4)
Background of MFA
One of the improvement
measures to strengthen the
governance and internal control of DSS schools
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Background of MFA (2)
Put forward by the Working Group on DSS pursuant to the recommendations in the Director of Audit’s Report No. 55 and the Public Accounts Committee
Report No. 55
EDB Circular No. 7/2012, “Improvement Measures to Strengthen the Governance and Internal Control of DSS Schools”
dated 30 July 2012
Other Complementary Measures
Completing Self-evaluation Checklist
Setting up Governance Review Sub- committee
Putting up essential items to School Management Committee (SMC)/
Incorporated Management Committee (IMC) for discussion and approval
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MFA - Four Specific Aspects
o General Administration of the SMC/IMC o Human Resources and Personnel Matters o Financial Management
o School Fee Remission and Scholarship Schemes
Self-evaluation Checklist
MFA - Four Specific Aspects (2)
The audit on the management aspect is anchored on the self-evaluation checklist to
enhance school governance and internal control
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MFA - Approach
Continue to be compliance
checking on a test-check basis
plus an examination and evaluation of the
appropriateness, adequacy and implementation of a
school’s major policy and
internal control system
Management Aspects
Finding out whether the school has put in place relevant school-based policies in the
management aspects with proper deliberation and approval of the SMC/ IMC
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Management Aspects (2)
Examples of school-based policies:
Declaration of conflict of interest
HR and personnel matters, such as staffing structure, staff recruitment, remuneration, promotion, staff appraisal, discipline, etc.
Resources allocation, such as use of
grandfathered reserve, operating reserve
Fee remission and scholarship schemes:
eligibility benchmarks
Management Aspects (3)
Examining whether the school-based policies are:
in compliance with the statutory and administrative requirements
reasonable and acceptable with reference to relevant regulations, legislations and prevailing Government policies
implemented with sufficient control systems in place
properly implemented and in consultation with relevant stakeholders
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Management Aspects (4)
Examples:
Statutory and administrative requirements:
manager registration, IMC manager election, full composition of SMC/IMC, etc.
Requirements under the DSS:
2-month surplus in the Operating Reserve, eligibility benchmark of fee remission
schemes, etc.
Internal control systems: Self-evaluation
Checklist, operation of GRSC, SDA, etc.
MFA Implementation
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2014/15: Piloting in 3 schools
2015/16: Piloting in 7 schools 2016/17: Piloting in 12 schools
2017/18: Full-scale (planned)
SHARING OF AUDIT FINDINGS:
MANAGEMENT ASPECTS
2015/16 PILOT
Major Observations:
Management Aspects
General Administration of SMC/IMC
Declaration of Conflict of Interests
HR Management
Quality Assessment and Compliance
HR and Personnel Management
Staff Recruitment
Fee Remission/Scholarship Scheme
Criteria for Awarding Fee Remission &
Publicity
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School-based policies are reasonable &
properly implemented
General Administration of SMC/IMC
Governance of SMC/IMC
Proper deliberation &
approval of school-based
policies &
procedures
Policies are in compliance with
statutory &
administrative requirements
Management of Conflict of
Interest
SMC/IMC &
its GRSC performing its role &
functions?
e.g. policies on declaration of conflict of interest,
Major Observations –
General Administration of SMC/IMC
Declaration of Conflict of Interest
Major observations:
School-based policy/procedures on declaration of conflict of interest for managers and/or staff not in place and/or
endorsed by SMC/IMC
No proper records of declared conflicts & necessary actions taken to avoid conflict of interest
Recommendations:
Draw up school-based policies/procedures to require school personnel to declare conflict of interest, which should be deliberated and endorsed by SMC/IMC
Properly record all declarations made and the necessary actions taken together with considerations
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Major Observations –
General Administration of SMC/IMC (2) HR Management
Major observations:
HR policies (such as staff recruitment and performance management) not endorsed by SMC/IMC
SMC/IMC has not clearly set out criteria and guidelines on approving staff establishment and remuneration
Recommendations:
School-based HR policies should be:
endorsed by SMC/IMC
properly documented
made known to all staff for transparency
Refer to EDB Circular No. 17/2012 and ICAC’s “Best Practice
Major Observations –
General Administration of SMC/IMC (3) Quality Assessment and Compliance
Major observations:
School manager had not been registered under the Education Ordinance, Cap 279
School’s attention drawn to:
→ section 27- “No person shall act as a manager of a school unless he is registered as a manager of the school under section 29(1).”
→ section 40AU(2) - “The incorporated management committee shall, within three months from the date on which the failure to maintain full composition arises
(a) ensure that a person qualified to fill the vacancy is nominated for registration as a manager; and
(b) forward to the Permanent Secretary an application by the person for registration as a manager.”
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General Administration of SMC/IMC
Declaration of Conflict of Interest
HR Management
Quality Assessment and Compliance
HR & Personnel Management
Staff Recruitment
Fee Remission/Scholarship Scheme
Criteria for Awarding Fee Remission &
Major Observations:
Management Aspects
HR & Personnel Management
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Open, fair &
transparent
•selection panel
•pre-set selection criteria
•assessment methods Selection
process
Known to all relevant
staff
Policy /
Procedures on Staff
Recruitment
Refer to relevant guidelines
•ICAC
•EDB
Known to all staff
•Internal
communication
Proper records
Policy
/Procedures on Handling
Staff Grievances
Proper records
Major Observations –
HR & Personnel Management
Staff Recruitment - Assessment Methods
Major observations:
No school-based policy/guidelines on the use of different assessment methods for selecting staff
Recommendations:
Refer to:
“Recommendations on Administration of Teaching Staff in Schools under DSS” from ICAC
ICAC’s “Best Practice Checklist: Governance and Internal Control in Schools”
Major Observations –
HR & Personnel Management (2)
Staff Recruitment - Assessment Methods
Major observations:
No proper records of the pre-defined criteria for shortlisting candidates
Inconsistency in completing assessment records across different selection panels in a school
Recommendations:
Keep proper records throughout the selection process
Establish a checks and balances system
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Major Observations on
the Management Aspects
General Administration of SMC/IMC
Declaration of Conflict of Interest
HR Management
Quality Assessment and Compliance
HR and Personnel Management
Staff Recruitment
Fee Remission/Scholarship Scheme
Criteria for Awarding Fee Remission &
Fee Remission/ Scholarship Schemes
Remission Fee Scholarship and
Schemes
No less favorable than government financial
assistance schemes
•Greater school
choices for parents
•Students’
admission not affected by socio- economic
backgrounds
Increase
transparency and access of
information
Parents to make an informed choice of schools
Enhance utilization of the reserve
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Major Observations –
Fee Remission/Scholarship Schemes
Criteria for Awarding Fee Remission
Major observations:
Eligibility benchmarks less favorable than the government financial assistance schemes
Adjusted eligibility thresholds for full remission (e.g. 3 &
4-member families) were not taken into account
Recommendations:
The set of eligibility criteria should be no less favorable than the government financial assistance schemes
across all levels of remission
Apply to EDB for exemption, if required, after seeking
Major Observations –
Fee Remission/Scholarship Schemes (2)
Publicity
Major observations:
Not sufficient transparency as required under para. 5 of EDBC No. 10/2012
Recommendations:
Application form for admission, letter offering admission, school website, school profile and prospectus should
include:
Details - school fee, eligibility criteria and levels of remission
Clear statement - needy students including those receiving assistance under CSSA and Student Finance Office could apply & be eligible for fee remission
Contact information - telephone number for enquiry
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Financial Management
EDB’s policy requirements on management aspect:
Maintain 2-month operating expenses in the operating reserve
Deploy Grandfathered Reserve according to approved plan
To ensure schools could put in place longer- term development strategies for sustainability and financial viability
No major observation noted so far
Way Forward
Consolidate piloting experience and collect feedback from the sector before full
implementation
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Contact Us
School Administration 3 Section
Ms Amy CHENG 3509 7490
Ms Isabel WONG 3509 7459
Mr Brian YU 3509 7491
THANK YOU
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