Governance and Internal Control in Schools

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Governance and Internal

Control in Schools

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FOREWORD FOREWORD

The running of a school does not only involve the Principal and a team of general support staff, but also the teachers who are assigned administrative duties. Like any organization receiving Government financial assistance, schools are facing rising public expectation of good governance in their operations. It is therefore imperative for those responsible for the management of schools to ensure that there is good governance and adequate internal control in the school operation.

This checklist aims at providing a user-friendly guide to help schools set up a good governance structure and adopt internal control measures in their operations. Schools are advised to adapt the recommended measures to suit their respective organizational structure, resource capability and operational needs.

The Corruption Prevention Department (CPD) of the Independent Commission Against Commission (ICAC) provides free, confidential and tailor-made advice to both public and private organizations on the ways to enhance governance and implement corruption prevention measures. For further information, please contact the CPD by telephone at 2526 6363, by fax at 2522 0505, or by email at cpas@cpd.icac.org.hk.

For any enquiry about the guidelines and instructions issued by the Education Bureau (EDB), please refer to the EDB website at www.edb.gov.hk.

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HOW TO USE THIS BEST PRACTICE CHECKLIST

For quick and easy reference, you will find the following icons throughout this Best Practice Checklist. They serve to lead you to the information you want:

Guideline – standard code of conduct, procedural guideline or work manual for reference

Sample Form – sample forms for use where applicable

Legislation – extracts from relevant ordinances, such as the Prevention of Bribery Ordinance

Pointer – cross reference with other sections of the Best Practice Checklist

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CHAPTER 1 – GOVERNANCE

1.1 Good Governance 1

1.2 School Management Committees 1

1.2.1 Roles and Composition 1

1.2.2 Conduct of Meetings 1

1.3 Policy on Transparency and Disclosure 2

1.4 Parent-Teacher Association 2

1.5 Integrity Management 3

CHAPTER 2 – INTEGRITY MANAGEMENT

2.1 Code of Conduct 4

2.2 Key Provisions of the Code of Conduct 4 2.2.1 Commitment to Ethical Practices 4

2.2.2 Acceptance of Advantages 4

2.2.3 Acceptance of Entertainment 5

2.2.4 Conflict of Interest 5

2.2.5 Abuse of Official Position 5

2.2.6 Protection of Classified Information 5 2.2.7 Permission to Take up Outside Work 6

2.2.8 Compliance with the Code 6

2.3 Promulgation of the Code 6

CHAPTER 3 – INTERNAL CONTROL

3.1 Introduction 7

3.2 Key Elements of an Internal Control System 7 3.2.1 Clear Policies and Procedures 7

3.2.2 Segregation of Duties 7

3.2.3 Keeping of Records 7

3.2.4 Information Security 7

CONTENTS CONTENTS

Page

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CHAPTER 4 – PROCUREMENT

4.2 Key Processes 9

4.3 Recommended Practices 10

4.3.1 Basic Controls 10

4.3.2 Making of Purchase Requisitions 10

4.3.3 Petty Cash Purchases 11

4.3.4 Sourcing of Suppliers or Service Providers 11

4.3.5 Procurement by Quotations 12

(for low-value purchases)

4.3.6 Procurement by Tenders 12

(for high-value purchases)

4.3.7 Evaluation of Tender Proposals 13

4.3.8 Receipt of Goods 14

4.3.9 Payment Processing 15

4.3.10 School Management Oversight and Supervision 15

4.3.11 Others 15

4.3.11.1 Maintenance of Approved Suppliers 15

Lists

4.3.11.2 Administration of Service Contracts 16 (e.g. cleaning and security contracts) 4.3.11.3 Control of School Property 17

CHAPTER 5 – TRADING OPERATIONS

5.3.1 Compliance with EDB’s Guidelines 18 5.3.2 Selection of Trading Operators 19 5.3.3 Monitoring of Service and Renewal of Contracts 19 Page

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CHAPTER 6 – STAFF ADMINISTRATION

6.3.1 Policies and Guidelines 21

6.3.2 Staff Recruitment 21

6.3.3 Employment of Temporary Staff 23

6.3.4 Remuneration Package 23

6.3.5 Monitoring of Staff Attendance 24

6.3.6 Performance Appraisal 24

6.3.7 Staff Promotion 25

6.3.8 Disciplinary Actions 25

6.3.9 Handling of Staff Complaints 26

CHAPTER 7 – ADMISSION OF STUDENTS

7.3.1 Invitation of Applications 27

7.3.2 Shortlisting and Assessment of Applicants 28

7.3.3 Management Reports 29

7.3.4 Handling of Complaints 29

CHAPTER 8 – FUND-RAISING, DONATIONS AND SPONSORSHIPS

8.3.1 Basic Principles 31

8.3.2 Acceptance of Donations/Sponsorships 31 Page

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CHAPTER 9 – BUILDING MAINTENANCE

9.3.1 Project Brief (for appointment of consultants) 34 9.3.2 Tender Documents (for appointment of 34 contractors)

9.3.3 Tender Method 36

9.3.4 Tendering 36

9.3.5 Monitoring of Work Progress 37

9.3.6 Interim Payments 38

9.3.7 Work Variations 38

9.3.8 Monitoring of Work Quality 39

9.3.9 Completion of Works and Final Payment 39

APPENDICES

1 Sample Code of Conduct for School Managers 40 Annex 1 - Extracts of the Prevention of 48

Bribery Ordinance (Cap. 201)

Annex 2 - Guidelines for Handling Gifts/Souvenirs 51 Given to Managers in their Offical Capacity

Form A - Report on Advantages Received 52 Annex 3 - Sample Letter to Suppliers/Contractors 53

regarding Policy on Acceptance of Advantages by School Managers/Staff

Annex 4 - Sample Notice to Parents regarding Policy on 54 Acceptance of Advantages by

School Managers/Staff

Annex 5 - Examples of Conflict of Interest Situations 55 Form B - Declaration of Conflict of Interest by 56 Managers

Page

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Annex 6 - Measures to Manage Possible Conflict of 57 Interest Arising from Managers' Bidding

for Supply of Goods/Services to the School

2 Sample Code of Conduct for Staff of Schools 58 Annex 1 - Extracts of the Prevention of 68

Bribery Ordinance (Cap. 201)

Annex 2 - Guidelines forHandling Gift/Souvenirs 71 Given to Staff in their Official Capacity

Form A - Report on Advantages Received 72 Annex 3 - Sample Letter to Suppliers/Contractors 73

regarding Policy on Acceptance of Advantages by School Managers/Staff

Annex 4 - Sample Notice to Parents regarding Policy on 74 Acceptance of Advantages by

School Managers/Staff

Annex 5 - Examples of Conflict of Interest Situations 75 Form B - Declaration of Conflict of Interest by 77 Staff

3 Sample Code of Conduct for Parent-Teacher Association 78 4 Sample Form for Declaration of Interest

(for specific duties such as procurement and recruitment)

5 Purchase Requisition 82

6 Petty Cash Replenishment Form 84

7 Sample Probity Clause in Tender Documents 85

8 Sample Anti-collusion Clause 86

Annex - Declaration on Compliance with the 87 Anti-Collusion Requirements

9 Sample Probity Clause in Service Contracts 88

Annex - Declaration by Contractor 90

on Compliance with the

Page

81

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10 Sample Interview Assessment Form for Recruitment of

Teaching Staff

11 Sample Performance Appraisal Form 92

12 Sample Interview Assessment Form for Promotion of 95 Serving Teachers

13 Sample Interview Assessment Form for Admission of 96 Students

91 Page

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PROBITY REQUIREMENTS PROBITY REQUIREMENTS

Chapter Chapter

GOVERNANCE GOVERNANCE

Good Governance 1.1

Good governance is the key to preventing corruption. Being a nurturing ground for the young generation, it is essential for the school management to set a model of good governance and uphold an ethical culture in school.

School Management Committees 1.2

Under the Education Ordinance (Cap. 279), each aided school is required to establish an Incorporated Management Committee to manage the school. Schools under the Direct Subsidy Scheme and other types of schools are also encouraged to set up a School Management Committee for the same purpose. The following safeguards help ensure accountability of these management committees.

1.2.1 Roles and Composition

Specify the terms of reference of the management committee, including accountability to the Government and the public, for the proper running of the school.

Define clearly the roles and responsibilities of the Chairman of the management committee, the School Supervisor and the Principal.

Include in the management committee members representing different stakeholders (e.g. school sponsoring bodies, parents, teachers, alumni, etc.) to enhance checks and balances.

1.2.2 Conduct of Meetings

Lay down the quorum for meetings.

Lay down the meeting frequencies, attendance requirements, and voting arrangements, etc.

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Draw up meeting schedules and notify members in advance.

Provide adequate time for members to go through the agenda and discussion papers before a meeting.

Resolve matters by circulation of documents only in case of emergency.

Ensure all key and appropriate issues are deliberated by members in a timely manner.

Prepare minutes of meetings promptly after each meeting.

Record accurately the committee’s decisions, including members’ views, in particular any dissenting comments.

Require the minutes to be endorsed by the management committee and signed by the Chairman.

Policy on Transparency and Disclosure 1.3

Make transparent the school’s operations (e.g. governance of the school, donations received, etc.), through disclosure in the school prospectus, website, or annual report.

Publicise the objectives of the school, and its achievements towards the objectives.

Establish communication channels (e.g. school newsletter or website) through which persons concerned could obtain information about the school.

Parent-Teacher Association 1.4

GOVERNANCE Chapter 1

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Require the PTA members to declare any conflict of interest when handling school matters, such as selection of suppliers, contractors or trading operators.

Integrity Management 1.5

Issue a Code of Conduct for compliance by the school staff, and members of the school management committee (i.e. school managers) and the PTA ( Section 2.1).

Organise capacity building workshops on probity for the school managers and PTA members, especially those who are involved in school administration ( Section 2.3).

GOVERNANCE Chapter 1

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PROBITY REQUIREMENTS PROBITY REQUIREMENTS INTEGRITY MANAGEMENT INTEGRITY MANAGEMENT

Code of Conduct 2.1

A key factor of good governance is to demonstrate that the school is committed to ethical practices. Schools should issue a Code of Conduct for compliance by the school managers, school staff, and PTA members ( Appendices 1 to 3). The respective Codes should set out the standard of integrity expected of them.

Key Provisions of the Code of Conduct 2.2

2.2.1 Commitment to Ethical Practices

Include in the Code a statement that the school is committed to good governance and ethical practices.

State the school’s “zero tolerance” policy towards corruption and fraud.

2.2.2 Acceptance of Advantages

Ensure the school managers and staff are aware of the provisions and sanctions under the Prevention of Bribery Ordinance (POBO) (Cap. 201) in relation to acceptance of advantage ( Section 9 of the POBO¹ at Annex 1 of Appendies 1 and 2).

Prohibit school managers and staff from accepting advantages from persons with whom they have official dealings, including their colleagues and subordinates, unless with the school’s permission.

State the permissible value of token gifts they are allowed to accept in their official capacity.

Lay down the procedures and authority for approval of acceptance of advantage, other than token gifts.

Chapter

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2.2.3 Acceptance of Entertainment

Remind school managers and staff to avoid accepting unduly lavish or frequent entertainment from persons with whom they have official dealings.

2.2.4 Conflict of Interest

Require school managers and staff to avoid and declare any actual or perceived conflict of interest.

Provide examples of conflict of interest in work situations (e.g. relationship with a supplier when making procurement, or with a candidate when handling staff recruitment).

Provide different standard forms for declaration of conflict of interest by school managers and staff respectively ( Form B under Annex 5 of Appendices 1 and 2).

Establish a system to record and manage the declared conflicts, including the actions to be taken to mitigate the conflicts.

2.2.5 Abuse of Official Position

Remind school managers and staff to avoid using their official position or power to benefit themselves, their relatives or personal friends.

2.2.6 Protection of Classified Information

Prohibit unauthorised disclosure of any classified information by school managers and staff.

Establish a system for protection of classified information (e.g. restricting access to authorised staff only, keeping records of recipients of confidential documents, and using passwords to protect computer data).

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2.2.7 Permission to Take up Outside Work

Require staff to seek approval from the school before taking up any outside work.

Grant permission, if outside work is allowed as a policy, only if it would not give rise to any conflict of interest.

Require the staff concerned to seek fresh approval on an annual basis.

2.2.8 Compliance with the Code

Specify the disciplinary sanctions against breaches of the Code, such as warnings, dismissals, etc.

Designate a staff member of the appropriate level to handle enquiries about the Code.

Promulgation of the Code 2.3

Issue the Code to each school manager or staff member upon appointment, and periodically remind them to abide by the Code through circulation.

Arrange capacity building sessions for both new and serving school managers and staff, with the assistance of ICAC.

INTEGRITY MANAGEMENT Chapter 2

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INTERNAL CONTROL INTERNAL CONTROL

Chapter Chapter

Introduction 3.1

Effective internal control is essential to good governance, and is the key to preventing corruption through reducing risks of malpractice and fraud. This chapter highlights the framework of a sound internal control system.

Key Elements of an Internal Control System 3.2

3.2.1 Clear Policies and Procedures

Lay down clear policies and procedures for the school’s major operations, such as staff administration and procurement.

Define clearly the respective roles, responsibilities and powers of the staff members involved in the processes.

Ensure the guidelines are understood by the staff concerned through briefing or training.

Review the policies and procedures regularly and update them as necessary to suit operational needs.

3.2.2 Segregation of Duties

Segregate major duties as far as practicable to enhance checks and balances.

3.2.3 Keeping of Records

Require the staff to keep proper records of the activities carried out and the decisions made to ensure accountability.

3.2.4 Information Security – Please refer to Section 2.2.6

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3.2.5 Supervision

Require designated staff of the school to conduct spot checks on the activities to ensure compliance with the laid down rules and guidelines.

Report any irregularities identified to the management of the school for consideration of the action to take.

3.2.6 Feedback Channels

Establish a user-friendly channel for feedback or complaints from staff, students, parents and parties having business dealings with the school.

Designate an independent staff member to investigate into any irregularities reported.

Audit 3.3

Appoint an independent auditor to audit the activities of the school periodically, including checking compliance with the relevant statutory and regulatory requirements, the administrative requirements laid down by the Education Bureau (EDB), and the school’s policies and procedures.

Where practicable, establish an audit committee under the school management committee ( Section 1.2) to consider the audit reports.

INTERNAL CONTROL Chapter 3

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PROCUREMENT PROCUREMENT

Chapter Chapter

Introduction 4.1

School operations entail frequent procurement of goods and services. To achieve value for money and ensure the goods and services are purchased in a transparent and competitive manner, it is essential for schools to have an effective and properly controlled procurement system in place.

Key Processes

²

4.2

Minor

purchases High-value

purchases Small/medium–value

purchases

Making of purchase requisitions ( 4.3.2)

Sourcing of suppliers/

service providers ( 4.3.4)

Purchasing with petty cash ( 4.3.3)

Purchasing by quotations ( 4.3.5)

Purchasing by tenders ( 4.3.6)

Ordering and receipt of goods/services ( 4.3.8)

Payment processing ( 4.3.9)

School management oversight and supervision

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Recommended Practices 4.3

4.3.1 Basic Controls

Specify the procurement methods, procedures and approving authorities for purchases of different financial limits, making reference to the procurement guidelines issued by the EDB ( EDB Circular No. 15/2007).

Specify the authority for approving exemptions to the procurement guidelines (e.g.

not obtaining the required number of quotations due to urgency or a sole supplier situation).

Where resources allow, designate a team of staff to coordinate and oversee procurement activities in the school.

Segregate the procurement duties, such as sourcing of suppliers, evaluation of bids, approval of purchases, receipt of goods, etc. where practicable.

Require all staff involved in the procurement process to declare any actual or potential conflict of interest ( Appendix 4), and where necessary reassign the duties to other staff members if a conflict has been declared.

Maintain proper documentation of the procurement process, including decisions and justifications.

Designate supervisory staff to check compliance with the laid down procedures and to ensure decisions are properly made.

4.3.2 Making of Purchase Requisitions

Make purchase request on a standard form ( Appendix 5), stating the goods or services required, for approval by the designated authority.

Ensure the goods or service specifications are not overly restrictive to favour any particular supplier or put off competitive bids (e.g. to avoid specifying brand

PROCUREMENT Chapter 4

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Require a more senior staff member of the school to vet and endorse the specifications and to approve any brand name specification based on justifiable grounds.

Consider engaging term contractors for frequently required purchases, in particular low-value goods or services (e.g. office supplies and minor maintenance services).

4.3.3 Petty Cash Purchases

Assign a designated staff member to keep the petty cash account of a preset limit, and lay down the procedures and authorities for replenishment.

Arrange payment or reimbursement only upon submission of a valid receipt or an original invoice, or a claim form duly signed by the staff concerned and certified by an authorised staff if no receipt/invoice is produced.

Require the staff concerned to acknowledge receipt of the petty cash payment or reimbursement.

Request replenishment from the accounting unit or staff, using a petty cash replenishment form ( Appendix 6), attaching all the vouchers and receipts for the claims made.

4.3.4 Sourcing of Suppliers or Service Providers

Check whether the school has maintained lists of suppliers/service providers for different goods and services ( please refer to Section 4.3.11.1 on best practices in relation to list maintenance).

• If yes, invite the required number of suppliers or service providers from the list to bid on a fair share basis (e.g. by rotation), in addition to any nominations from the users.

• If no, source suppliers or service providers according to pre-determined criteria and avoid including only suppliers nominated by the users.

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4.3.5 Procurement by Quotations (for low-value purchases)

Provide bidders with detailed descriptions of the goods or services required, and set a deadline for the submission of bids.

Require written quotations from bidders where practicable.

If verbal quotations are accepted, record in writing the dates of receiving the quotations, the names of bidders, the price offers, and the name of the responsible staff.

Take measures to prevent leakage of the quotation information or tampering with the submitted quotations before the submission deadline (e.g. assign a staff member to keep all quotations in a secure place before opening, or receive electronic quotations through a designated mailbox with restricted access and only to be opened after the closing time).

Keep proper records of all quotations received, and conduct spot checks to prevent and deter bogus quotations (e.g. verifying with the suppliers) where practicable.

Evaluate the quotations received based on pre-determined selection criteria (e.g.

price and quality factors).

Seek approval from a higher level of authority, with justification, for not selecting the lowest bid, and keep record of such decisions.

4.3.6 Purchasing by Tenders (for high-value purchases)

Decide the tendering approach (e.g. open tender by inviting bids through the website or newspaper advertisement, or restrictive tender by inviting bids from a shortlist of suppliers (e.g. from the approved suppliers list), or sourcing from the market based on a set of pre-qualification criteria).

Include in the tender invitation documents:

• clear product/service specifications (i.e. the mandatory requirements);

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• tender assessment criteria in broad terms and their weightings in assessment, if price is not the only consideration;

• contract terms and conditions (e.g. any after-sale service);

• deadline for submission of tender or proposals;

• submission method (e.g. proposals in duplicate to be put in a sealed envelope);

• a warning against bribery ( sample clause at Appendix 7); and

• an anti-collusion clause prohibiting tender rigging ( sample clause at Appendix 8).

Ensure all bidders are given the same information and consider giving a briefing to all interested bidders shortly after the issue of tender invitation, if applicable.

Designate a staff member to keep the tenders submitted in a secure place before the closing time or deposit them in a double-locked tender box with the two keys held by separate staff members.

Accept late tenders only with the approval of the designated authority and with justification.

Assign a tender opening team (comprising at least two members) to open the tenders immediately after the closing time.

Designate a staff member not involved in the tender evaluation to keep duplicate copies of the tenders for future checking if necessary.

4.3.7 Evaluation of Tender Proposals

Appoint a tender evaluation panel (comprising the user and the procurement staff and other specialists, e.g. IT experts, as appropriate) to evaluate the tenders, if price is not the only consideration.

Remind the panel members to declare any conflict of interest.

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Give bidders an equal chance to make a presentation, if required, before the assessment panel.

Select the bidder with the highest total score (i.e. the best offer), if not, give reasons for not doing so.

Submit the recommended tender together with an evaluation report to the approving authority.

If post-tender negotiation is necessary:

• determine the baseline for negotiation;

• assign a team of staff (at least two) of the appropriate level to conduct the negotiation for purchases of a high value;

• document the salient points of the negotiation process; and

• avoid changes to any mandatory tender requirements during negotiation to prevent any allegation of unfairness, and consider re-tendering if there are any substantial changes to the mandatory requirements.

4.3.8 Receipt of Goods

Assign a staff member or the user to inspect the goods delivered against the purchase order before acceptance.

Arrange testing of the goods received (e.g. specialist equipment) by qualified staff if appropriate.

Require the staff concerned or users to certify acceptance of goods or completion of service within a specified time limit.

Ensure that any defective goods, short delivery or substandard service are handled promptly (e.g. by asking the supplier to make good the shortfall) and recorded.

For recommended practices on the control of school property, please refer to

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4.3.9 Payment Processing

Arrange payment by cheques or direct transfer from the school account.

Establish authorisation levels for approving payments and signing cheques.

Verify the description and quantity of goods on the invoices against purchase orders.

Ensure invoices are certified by the user or recipient and endorsed by the approving authority before effecting payment.

4.3.10

School Management Oversight and Supervision

Conduct spot checks on procurement activities to ensure the laid down procedures are followed and to detect/deter malpractice.

Where resources permit, require the staff responsible to compile regular management reports on purchases (e.g. purchases from sole supplier and purchases of substantial value) for review by the school management.

Establish a system to detect and deter split orders to circumvent the approving authority (e.g. supervisory checks on the pattern of purchases).

4.3.11 Others

4.3.11.1 Maintenance of Approved Suppliers Lists

Maintain different lists of suppliers or service providers for frequently purchased goods or services.

Lay down the criteria for inclusion and deletion of suppliers/service providers on the respective lists (e.g. poor performance) and specify the authority for inclusion or deletion.

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Establish a channel for interested potential suppliers/service providers to apply for inclusion in the lists.

Collect feedback from users about the suppliers’ performance after purchase, and take appropriate action in case of poor performance (e.g.

suspension from invitation to bid for a specified number of times, or deletion from the list).

4.3.11.2 Administration of Service Contracts (e.g. cleaning and security contracts) Specify in the contract agreement, among other terms and conditions,

the service standards (e.g. standard and frequency of service, minimum manpower, etc.), and the remedies for non-compliance or default service (e.g. rectification within a specified period, payment deduction, liquidated damages, etc).

Specify the rates for additional service (e.g. emergency cleaning service or additional security guards on special occasions) and the response time.

Include in the contract conditions a probity clause prohibiting the contractor and its staff from offering or soliciting bribes when performing duties under the contract ( Appendix 9).

Establish a disciplinary system to deal with non-compliance or unsatisfactory performance of the contractor (e.g. issue of warnings or payment deduction).

Assign staff to monitor the standard of service and report on any deficient or default service.

Collect user feedback on the services provided.

Hold regular meetings with the contractor’s management to discuss problems and review performance as necessary.

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Ensure contract renewal is based on good performance, and conduct tender exercise periodically with a view to exploring competitive alternatives in the market.

4.3.11.3 Control of School Property

Maintain a register of property items (e.g. equipment, furniture), covering the unique identification code assigned to each item, description, quantity, date of purchase, location, name of holder if any, date and reason for disposal or writing-off, etc.

Assign independent staff to conduct periodic stock-taking and inspection on valuable property items.

Report any missing items or irregularities to the school management for follow-up action.

Require disposal of property items (e.g. obsolete or beyond economical repair) and disposal methods (e.g. destruction, sale or donation) to be approved by a designated authority.

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TRADING OPERATIONS TRADING OPERATIONS

Chapter Chapter

Introduction 5.1

The majority of schools are running trading operations for the provision of services to students (e.g. tuck shops and canteens, sale of lunch boxes, school uniforms and exercise books, provision of school bus service, etc.). It is important for schools to ensure that the selection of trading operators are conducted in a fair and competitive way and the services provided are up to the required standards.

Key Processes 5.2

Recommended Practices 5.3

5.3.1 Compliance with EDB’s Guidelines

Abide by EDB’s guidelines on conducting trading operations in schools, including those governing solicitation or acceptance of donations from trading operators ( EDB Circular No. 24/2008).

Selection of operators ( 5.3.2)

Monitoring of services ( 5.3.3)

Periodic comparison of price and quality

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5.3.2 Selection of Trading Operators

Select trading operators following the procurement best practices recommended in Chapter 4.

Follow the procurement guidelines as laid down by the school or EDB in selecting trading operators.

Set up selection committees comprising parent and teacher representatives to assess the proposals received based on a pre-determined marking scheme.

Require members of the selection committee, including parent and teacher representatives, to declare any conflict of interest arising from their relationships with the bidding operators.

5.3.3 Monitoring of Service and Renewal of Contracts

Establish a monitoring committee, comprising parent and teacher representatives, to supervise the trading operations and report to the school management periodically.

Collect feedback from students, teachers, and parents periodically to evaluate the standard of service provided.

Take into account the performance of existing trading operators when they are being considered for renewal of contracts or if they bid for the school’s contracts in future.

TRADING OPERATIONS Chapter 5

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STAFF ADMINISTRATION STAFF ADMINISTRATION

Chapter Chapter

Introduction 6.1

Effective staff administration, such as staff recruitment and appraisal, is important to a school because it helps ensure that staff of the right quality are employed, enhance staff morale, and minimise opportunities for abuse or the perception of such. The basic corruption prevention principles in staff administration are openness and fairness, clear accountability and impartial enforcement of rules and regulations.

Key Processes 6.2

Listed below are the key processes of staff administration. The recommended best practices and control measures for each process are detailed in the respective sections.

New Post Temporary Post

Setting of policies and guidelines ( 6.3.1)

Recruitment of staff ( 6.3.2 - 6.3.3)

Determination of remuneration ( 6.3.4)

Performance appraisal ( 6.3.6)

Taking of disciplinary actions

( 6.3.8)

Handling of complaints

( 6.3.9)

Staff Misconduct Staff Complaint

Supervision of staff

( 6.3.5)

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Recommended Practices 6.3

6.3.1 Policies and Guidelines

Lay down in guidelines and make known to all staff the policies for staff administration matters, including:

• staff recruitment, promotion and posting policies;

• staff remuneration packages, covering salary scales, fringe benefits, bonus or gratuity, as appropriate, for each rank of staff or each post;

• job descriptions, working hours and other operational requirements such as overtime work arrangements;

• the authority for approval of overtime work and rates payable;

• the performance appraisal system;

• the disciplinary system, such as the administration of sanctions and levels of authority (e.g. warnings and dismissals); and

• the mechanism for handling staff complaints.

6.3.2 Staff Recruitment

Clearly define the entry requirements of each rank or post (e.g. academic and professional qualifications, years of relevant experience, aptitude and any special skills), and seek approval from the school management or the designated authority.

Advertise job vacancies in newspapers and on the website of the school.

State clearly in the advertisement the job description, entry requirements and other essential information, such as the application deadline, any written test, correspondence address (and email address if any), and enquiry telephone number if available.

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Require applicants to declare in the job application form whether they have any friends or relatives working in the school.

Record all applications received in a register or date-stamp and file all applications properly upon receipt.

Require all staff involved in the selection process to declare any potential or actual conflict of interest and reassign staff to take over the process if a conflict is declared (e.g. a candidate is a relative or personal friend) ( Appendix 4).

Shortlist candidates for interview based on pre-approved criteria, such as years of relevant experience, levels of education attained, results of the written test, etc.

Form a recruitment panel to conduct selection interviews and skill tests as necessary.

Design an assessment form ( Appendix 10) showing the attributes for assessment and the corresponding marks or weightings, and require individual panel members to give marks on their own.

Record the combined scores of each candidate after the interview and the comments of the panel members on the form.

Prioritize the candidates according to their scores.

Make recommendations for selection to the school management for approval, giving justification if the highest scoring candidate is not recommended for selection.

Designate the authority to approve the panel’s recommendation and document the decision properly, in particular the reason if the panel’s recommendation is not accepted.

Verify the academic qualifications and work experience of the successful candidate(s) before offer of appointment.

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Make provisions for penalties (e.g. termination of employment) in case of corruption offence, fraud, or other misconduct in the employment contract.

Record all refusals of offer and ensure subsequent offers are made to candidates according to their priority.

6.3.3 Employment of Temporary Staff

Estimate the number of temporary staff required, the duration of engagement, and the estimated expenditure, based on the operational need and any performance benchmark, before seeking approval from the school management or the designated authority.

Determine or endorse the pay scale or hourly rates for temporary staff when granting approval.

Recruit temporary staff following proper recruitment procedures.

Maintain a pool of eligible candidates selected through proper recruitment procedures if there is an on-going demand for temporary staff.

Require the supervising staff to complete a performance appraisal form on the temporary staff who are given jobs repeatedly or to report on any adverse performance.

File performance appraisals or adverse records to facilitate record check on candidates before offering jobs.

Maintain proper employment and payment records of all the temporary staff.

6.3.4 Remuneration Package

Determine the salary scales and fringe benefits for each rank of staff or post.

Lay down the criteria and approving authority for determining the remuneration

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Seek approval from the school management or the designated authority for any offer which deviates from the remuneration package.

Specify the criteria and formula for calculating pay adjustments and non-standard payments (e.g. performance bonus).

Require any adjustment of salaries, benefits, and non-standard payments to be approved by the school management or the designated authority.

6.3.5 Monitoring of Staff Attendance

Put in place a system for recording staff attendance where appropriate (e.g. attendance register or electronic access control card system).

Require supervisors to check periodically the staff attendance records.

Produce exception reports on irregularities, such as repeated unpunctuality or absence from duty, for school management information and follow up action.

6.3.6 Performance Appraisal

Pre-determine and make known to all staff the core competencies and performance standards of each rank or post.

Record performance assessment using a standard appraisal form ( Appendix 11), covering all core competencies to be assessed.

Define clearly the duties of the appraisee, appraising staff, and counter-signing staff, at the beginning of the appraisal period.

Form a review panel to moderate the performance ratings of the appraisal reports if a large number of staff at the same level are being appraised and different appraising staff are involved to ensure consistent appraisal standards and fairness.

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Establish a channel for handling requests for review lodged by the appraisees.

6.3.7 Staff Promotion

Lay down and make known to all staff the eligibility criteria for promotion.

Announce the timing of the promotion exercise to the staff concerned.

Appoint a promotion board to assess all eligible candidates for promotion based on the pre-determined criteria, with reference to their appraisal reports for a specified period of time (e.g. three or four years).

Establish the interview procedures and design an assessment form for use by the board members if a promotion interview is conducted ( Appendix 12).

Require all members of the promotion board to declare any conflict of interest which should be recorded, and assign other staff to take over the process if a conflict is declared (e.g. the candidate under consideration is a relative or personal friend).

Prepare a report on the candidates recommended for promotion, in their order of priority, for approval by the specified authority.

Announce the promotion results as soon as possible to avoid speculation.

Provide a review channel for unsuccessful candidates.

6.3.8 Disciplinary Actions

Lay down and make known to all staff the circumstances warranting different disciplinary actions and the procedures to be taken in the case of misconduct or breaches of regulations.

Ensure fairness and consistency in taking disciplinary actions.

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6.3.9 Handling of Staff Complaints

Publicise the channels for complaint and make the procedures user-friendly.

Ensure that all information given is handled in strict confidence.

Assign an independent staff member, at the appropriate rank and not involved in the case, to investigate the complaint.

Maintain proper records of the investigation results.

Submit an investigation report, with recommendations for disciplinary action if applicable, to the designated authority (e.g. school principal) for consideration.

Inform the complainant of the outcome after investigation if appropriate.

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ADMISSION OF STUDENTS ADMISSION OF STUDENTS

Chapter Chapter

Introduction 7.1

Private schools and schools under the Direct Subsidy Scheme are given autonomy in the admission of students. These schools are free to draw up their own admission criteria and procedures (whereas aided schools are allowed to select students to fill the discretionary places). It is important to ensure that the admission process is fair and transparent to avoid allegation of favouritism or abuse.

Key Processes 7.2

Recommended Practices 7.3

7.3.1 Invitation of Applications

Draw up fair and objective student admission criteria in accordance with the principles laid down by EDB.

Invitation of applications ( 7.3.1)

Shortlisting of applicants ( 7.3.2)

Interviews or written tests ( 7.3.2)

Decisions on admission

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Publicise the school’s admission criteria and application procedures (e.g. through the school website) and organize briefing sessions to all interested parents.

Include a reminder in the application form that parents should not offer advantage to the school staff or school management committee members in connection with their applications.

7.3.2 Shortlisting and Assessment of Applicants

Set up an admission committee, comprising staff members of the appropriate level, to scrutinise applications.

Require the staff taking part in the assessment process to declare any conflict of interest (e.g. the student or parent is a relative or close personal friend).

Shortlist applicants for written examinations or interviews based on pre-determined criteria (e.g. academic results and participation in extra-curricular activities) approved by the school management.

If a written examination is required, take measures to ensure confidentiality of the examination questions.

Assign two staff members to jointly interview the applicants as far as practicable to enhance checks and balances.

Provide the interviewers with detailed guidelines (e.g. attributes to cover) and a marking scheme, and conduct a briefing to explain to them the assessment criteria if necessary.

Require the interviewers to individually record their assessment in a standard form designed for the purpose ( Appendix 13).

Notify applicants of the result as soon as possible.

ADMISSION OF STUDENTS Chapter 7

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7.3.3 Management Reports

Keep proper records of the admission exercise and retain the records for a specified period to facilitate audit checks.

Submit to the school management committee a report detailing the number of applications received, the applicants interviewed and accepted, and any cases given special consideration, etc. after each admission exercise.

7.3.4 Handling of Complaints

Establish formal procedures for handling complaints from unsuccessful applicants, and report the outcome to the school management committee.

ADMISSION OF STUDENTS Chapter 7

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FUND-RAISING, DONATIONS AND SPONSORSHIPS

Chapter Chapter

Introduction 8.1

Donations and sponsorships, in money or in kind, may be offered to schools. From time to time, schools may also organise fund-raising activities. As acceptance of donations, especially from parties who have business dealings with the school (e.g. suppliers), may easily give rise to perception of favouritism or bribes in disguise, it is essential for schools to put in place a transparent mechanism to ensure the donations or sponsorships received are properly accounted for and are used for the benefit of students.

Key Processes 8.2

Consideration to raise funds or accept donations/sponsorships

( 8.3.1)

Approval of acceptance ( 8.3.2)

Management of donations/

sponsorships received

( 8.3.3)

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Recommended Practices 8.3

8.3.1 Basic Principles

Lay down the principles and criteria for raising funds and accepting donations/

sponsorships, with reference to the guidelines issued by the EDB ( EDB Circular No. 14/2003). Examples of the guiding principles are:

• Donations/sponsorships/funds raised should be used for the benefit of students only.

• The acceptance must not adversely affect the reputation of the school.

• No conditions should be attached to the acceptance of any donations/

sponsorships, in particular those which will affect the school’s ability to carry out its functions impartially (e.g. giving preferential treatment to a donor’s child who is applying for admission to the school).

• The acceptance should not give rise to any perceived or actual conflict of interest, or put the school in a position of obligation to the donor/sponsor.

• Solicitation of donations from individuals/companies with which the school has business dealings (e.g. suppliers, contractors, trading operators) should be prohibited.

• The acceptance of donations/sponsorships from any supplier or contractor should not in any way give or be perceived to give the donor/sponsor an unfair commercial advantage over others in the same trade, industry or profession.

8.3.2 Acceptance of Donations/Sponsorships

Where a fund-raising campaign is held, clearly explain to the parents and students the objectives of the campaign and usage of the funds raised.

Establish a formal mechanism for the school management committee to consider and approve acceptance of donations/sponsorships.

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Take into consideration any recurrent costs that will arise before deciding to accept a donation/sponsorship (e.g. the maintenance cost of a donated equipment).

8.3.3 Management of Donations/Sponsorships

Register in detail all funds/donations/sponsorships received, including the value and purpose, and publicise in the school annual report or website.

Draw up formal procedures for the disbursement of the funds, donations or sponsorships received, including the approving authorities.

Compile reports on the usage of received funds, donations or sponsorships for scrutiny by the school management committee and EDB.

FUND-RAISING, DONATIONS AND SPONSORSHIPS Chapter 8

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BUILDING MAINTENANCE BUILDING MAINTENANCE

Chapter Chapter

Introduction 9.1

From time to time, schools may need to undertake building maintenance and repair works. These works may be managed by external consultants and carried out by contractors, under the supervision of the school staff. As such works are technical in nature and often involve substantial costs, there should be effective systems for the selection of suitable consultants and contractors, and for the administration of the contracts.

Key Processes 9.2

Preparation of project brief (for appointment of consultants) ( 9.3.1) Preparation of tender documents (for appointment of contractors) ( 9.3.2)

Determination of tender method ( 9.3.3) Tendering ( 9.3.4)

Monitoring of work progress ( 9.3.5) Processing of interim payments ( 9.3.6)

Handling of work variations ( 9.3.7) Monitoring of work quality ( 9.3.8)

Completion of works and final payment ( 9.3.9)

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Recommended Practices 9.3

9.3.1 Project Brief (for appointment of consultants)

Clearly define the scope of service (e.g. professional staff, frequency of work inspection, and reporting requirements).

Specify the deliverables and payment arrangements (e.g. staged payments).

Include in the terms and conditions of the contract the following probity clauses:

• An anti-bribery clause prohibiting offer or acceptance of advantage by the consultant and his employees when performing duties under the contract ( sample clause at Appendix 9).

• A clause requiring the consultant and his employees to declare conflict of interest, including their relationship with the contractors engaged for the works contract or with the school staff.

9.3.2 Tender Documents (for appointment of contractors)

Draw up detailed work specifications (e.g. items of work and time schedules for work completion).

Include in the tender documents the following probity requirements:

• An anti-bribery clause prohibiting offer of advantage to members of the school for the purpose of tendering ( sample clause at Appendix 7).

• An anti-collusion clause prohibiting tender rigging ( sample clause at Appendix 8).

Invite tenderers to make price offers according to a pricing schedule for specified work items to facilitate evaluation of bids and valuation of cost for subsequent works variations.

BUILDING MAINTENANCE Chapter 9

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Include the following terms and conditions in the contract:

• provisions for interim payments for works requiring a long period of time to complete (say 9 to 12 months);

• the amount of retention money to be paid until all works have been satisfactorily completed (e.g. about 10% of the contract sum);

• defect liability period³ ;

• criteria and conditions for extension of time⁴ ;

• conditions for liquidated damages, e.g. for late work completion;

• provisions for work variations⁵ ;

• material guarantees;

• insurance;

• an anti-bribery clause prohibiting offer or acceptance of advantage by the contractor and his employees in executing the contract ( sample clause at Appendix 9);

• a clause requiring the contractor and his employees to declare any conflict of interest when performing duties under the contract; and

• provisions for termination of contract.

3 After work completion, there should be a “defect liability period”, similar to a warranty period, during which the contactor has the responsibility to make good any defect.

4 An extension of time may be granted to the contractor if failure to complete any maintenance works by the agreed date is caused by factors outside the contractor’s control.

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9.3.3 Tender Method

Select the tender method by taking into consideration the factors shown in Table 1 below:

Tender Method Factors for Consideration

Open invitation for expression of interest

Usually for high-value contracts.

Usually for sourcing eligible consultants/ contractors and exploring what is available in the market.

The school needs to spare time and resources to conduct an open invitation.

Invitation of tenders from a shortlist

The school has a shortlist of consultants/ contractors who have been previously engaged or recommended by a trusted party.

The school can entrust the consultant to recommend a shortlist of contractors.

The school has in-house expertise to draw up a shortlist.

Single Tender Only for exceptional cases, with reasons such as urgency and safety considerations which cannot afford a tendering process.

Table 1 – Tendering Method

9.3.4 Tendering

Draw reference from the recommended procurement practices (please refer to Chapter 4).

Require the tenderers to submit the following information for evaluation of the technical or quality aspects of tender proposals:

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• number of qualified professionals employed;

• track record in providing similar maintenance works; and

• programme of works.

Apart from the shortlist mentioned in Table 1, make reference to the lists of consultants and contractors published by the relevant government departments (e.g. Architectural Services Department and Buildings Department) or professional bodies when compiling the list of consultants/contractors for invitation to tender.

Approach previous clients of the consultants/contractors under consideration for testimony of their previous performance as appropriate.

Award contract to the best offer.

9.3.5 Monitoring of Work Progress

Require the contractor to submit a work programme at the start to facilitate monitoring of work progress.

Appoint a staff member with technical knowledge (as project manager) within the school, if there is one, or enlist the help of members of the school management committee if they have the technical or professional knowledge, to monitor the progress of works, reporting to the senior management regularly.

Require the consultant, if one is engaged, to report progress of works regularly.

Require the project manager to hold regular meetings with the contractor, together with the consultant if any, to review work progress and any rectification work required.

Require the contractor to explain any delay and propose remedial measures.

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9.3.6 Interim Payments

Make interim payments to the contractor according to the contract terms.

Require the consultant, if one is employed, to certify work completion for the purpose of making payments.

For in-house managed works, require the project manager to confirm satisfactory completion of works before endorsing release of payments.

Retain a portion of payments (e.g. 10%) as retention money in accordance with the contract terms.

Submit regular reports on the project to the school management for monitoring.

9.3.7 Work Variations

Minimize the need for work variations which often entail special rates to be negotiated with the contractor.

Try to include all foreseeable maintenance works in the scope of works at the outset as far as possible.

Put in place the following safeguards for ordering work variations:

• require the project manager or the consultant to assess the need for and the scope of the proposed variations;

• require the contractor to estimate the rates for the proposed variations, which should be based on the schedule of rates in the contract as far as possible;

• specify the authority for approval of work variations of different costs;

• consider inviting new tenders for work variations if the scope or cost is substantial or disproportionate as compared to the original scope or value of the work ordered; and

• require the project manager or the consultant to submit regular reports on work

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9.3.8 Monitoring of Work Quality

For prolonged work projects, require the consultant (if there is one) to draw up a site supervision plan based on the contractor’s works programme, specifying the frequency of site inspections, work items for checking and the personnel involved.

Require the consultant to check the quality of works according to the site supervision plan or require the project manager to check the work according to the contractor’s work programme.

Where appropriate, require the project manager or the consultant to take photos of the works which will be covered up after completion as evidence of compliance with the quality requirements.

Require the project manager or the consultant to record and report any adverse observations, in particular any substandard works or default in deliverables.

Require the contractor to rectify any substandard works or make good the pledged deliverables before release of payment.

Require regular reporting of work progress to the school management.

9.3.9 Completion of Works and Final Payment

Require the project manager or consultant to certify completion of works as specified in the contract.

Require the project manager (and members of the school management committee if appropriate) or consultant to carry out a final inspection on the completed works, requiring the contractor to compile a list of defects for follow up action.

Make final payment upon certification of work completion by the project manager or consultant, except the retention money.

Require the contractor to make good all the defects identified within the defect liability period before releasing the retention money to the contractor.

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SAMPLE CODE OF CONDUCT FOR SCHOOL MANAGERS

Introduction

1. [Name of the School] (hereafter referred to as “the School”) is fully committed to the principles of honesty, integrity and fair play. It is therefore important for Managers¹ to handle the School’s business in a fair and impartial manner, and ensure that the School’s reputation will not be tarnished by any acts of dishonesty, impropriety or corruption. To this end, this Code of Conduct sets out the standard of conduct expected of all Managers.

General Principles

2. To uphold a high standard of integrity, Managers shall:

(a) ensure that their conduct would not bring the School into disrepute;

(b) refrain from doing anything which may compromise or impair their integrity or impartiality in handling the School’s business;

(c) adhere to any guidelines, instructions, regulations and procedures made by the Management Committee/Incorporated Management Committee² (IMC) for handling the School’s business, and governing the conduct and integrity standards expected of Managers; and

(d) maintain an open, transparent and welcoming environment in the best interest of all stakeholders including students, parents and teachers.

[Schools may include other suitable principles/core values.]

Compliance with Legislations and Professional Standards

3. Managers shall ensure policies and operations of the School are in full compliance with the relevant legislations and professional standards and requirements, in particular, the Education Ordinance (Cap. 279) and Education Regulations (Cap. 279A), circulars and advice issued by the Education Bureau (EDB), as well as any other guidelines and instructions issued by government departments and authorities for

1 Managers (校董) are persons who are registered as Managers of the school under the Education Ordinance

APPENDIX 1

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the implementation/enforcement of statutory requirements relating to the management and operation of schools.

Prevention of Bribery Ordinance (Cap. 201)

³

4. Managers are agents of the school and governed by section 9 of the Prevention of Bribery Ordinance (POBO) (Annex 1). Under the POBO, any Manager who, without the permission of the Management Committee/IMC of the school, solicits or accepts an advantage as a reward for or inducement to doing any act or showing favour in relation to the school’s business, commits an offence. The person offering the advantage also commits an offence. The term “advantage” is defined in the POBO and includes any gift (both of money and in kind), loan, fee, reward, commission, office, employment, contract, service and favour, etc., except entertainment. It is also an offence under section 9(3) of the POBO for any Manager to use any document containing false information with the intent to deceive the school.

5. The School’s policy on the solicitation, acceptance and offering of advantages and entertainment by Managers is set out in paragraphs 6-14.

Solicitation and Acceptance of Advantages

6. The School prohibits Managers from soliciting or accepting any advantage from parents and persons or companies having official dealings with the School (e.g. suppliers and contractors). Solicitation or acceptance of advantages by Managers from staff to whom they may have an influence⁴ is also prohibited.

7. Managers may accept, but should not solicit, the following advantages when they are offered on a voluntary basis:

(a) advertising or promotional gifts or souvenirs of a nominal value; or

(b) discount or other special offers given by any person or company to

3 The description and explanation of the legal requirements under the Prevention of Bribery Ordinance (POBO) in this Sample Code of Conduct are necessarily general and abbreviated for ease of understanding. Users of this Sample Code of Conduct are advised to refer to the original text of the POBO or seek legal advice on particular issues where necessary. The ICAC will not accept any responsibility, legal or otherwise, for any loss occasioned to any person acting or refraining from action as a result of any material in this Sample Code of Conduct.