Education Bureau
Circular Memorandum No. 108/2018
From : Permanent Secretary for Education To : Supervisors of Kindergartens, Kindergarten-cum-Child Care Centres not joining the Kindergarten Education Scheme but (i) redeeming voucher subsidy under Pre-primary Education Voucher Scheme and / or (ii) receiving (a) subsidies under Child Care Centre Subsidy Scheme, and/or (b) Subsidy for Manpower Enhancement, and / or (c) rent reimbursement - For necessary action
Ref. : EDB(FINMS)/KG/555(17/18) Date : 28 June 2018
Submission of 2017/18 Annual Audited Accounts by Kindergartens and Kindergarten-cum-Child Care Centres
NOT Joining the Kindergarten Education Scheme
Purpose
This circular memorandum requests Supervisors of Kindergartens (KGs) / Kindergarten-cum-Child Care Centres (KG-cum-CCCs) not joining the Kindergarten Education Scheme (collectively referred as “KGs”) but (i) redeeming voucher subsidy under the Pre-primary Education Voucher Scheme (PEVS) and / or (ii) receiving (a) subsidies under Child Care Centre Subsidy Scheme (CCCSS), and/or (b) Subsidy for Manpower Enhancement (SME) and / or (c) rent reimbursement to submit their annual audited accounts for the 2017/18 school / financial year within six months after the year end date of the school.
Background
2. The abovesaid KGs are required by Education Bureau (EDB) Circular Nos. 6/2011, 3/2008 and 2/2004 to submit their annual accounts audited by Certified Public Accountants (practising) registered under the Professional Accountants Ordinance. KGs joining PEVS in the 2016/17 school year but not joining the new kindergarten education scheme in the 2017/18 school year are also required to comply with the terms and conditions of PEVS as appropriate until the end of operation of all eligible classes or all existing eligible students have left the KG concerned, whichever is earlier, as stipulated in EDBC No. 7/2016.
EDB Circular No. 5/2014 sets out the guidelines on appointment of auditors.
Submission Requirements
3. The full set of annual audited accounts to be submitted to EDB should comprise –
- 2 - (i) the School Supervisor’s Certificate;
(ii) the Auditor’s Report; and
(iii) the statements as specified at Annex 1.
Templates for the annual audited accounts can be downloaded from the following address –
(a) https://kgac.edb.gov.hk (for School Portal users), or
(b) http://www.edb.gov.hk/circular/adhocforme/2018fdnskg-e.xlsm (for non-School Portal users).
KGs are highly recommended to use the above templates for preparation of their annual accounts and submit to EDB the soft copy electronically (through the School Portal Account or in CD) in addition to the hard copy of the audited accounts. Procedures for uploading the soft copy through the School Portal Account are set out at Annex 2.
4. The full set of the annual audited accounts must be forwarded to the following address within six months after the year end date of the school–
Management Services Section, Finance Division,
Education Bureau,
Room 1504, 15/F, Wu Chung House, 213 Queen’s Road East,
Wanchai, Hong Kong.
5. Schools redeeming voucher subsidy under PEVS which also receive CCCSS subsidy, and/or SME, and / or rent reimbursement at the same time need only to submit one set of audited accounts and accounted for in Statement 3 and Statement 1 at Annex 1 respectively. For schools redeeming voucher subsidy under PEVS with operating classes of both local and non-local curriculum, they should prepare Statement 1A instead of Statement 1 at Annex 1.
6. For closed schools, they should submit their final audited accounts (covering the period up to and including the last day of school operation) no later than four months from the date of cessation of operation.
Points for Special Attention
7. In preparing the annual audited accounts, School Supervisors are requested to observe and comply with all relevant terms and conditions of the PEVS / reimbursement of rent / CCCSS / SME as applicable to the KGs, including but not limited to the submission of annual audited accounts in prescribed formats to EDB for inspection. Schools’ attention is particularly drawn to the following–
(a) Schools are reminded to observe the list of items that are covered by school fees as set out in Appendix 1 of EDB Circular No. 16/2013, and not to charge parents for these items separately.
(b) Schools should follow the guidelines and general principles on the collection of fees and trading operations as promulgated in EDB Circular No. 16/2013,
- 3 -
properly report their school incomes (i.e. school fees, income from trading operations Note 1 and other income Note 2) in the annual audited accounts.
Where necessary, schools and their Auditors may be called upon to provide supplementary information on the school incomes so reported.
(c) Schools should observe the guiding principles on scope of expenditure at Annex 3 in the use of resources from school fees (incl. the fee subsidy under PEVS) which should be basically devoted to supporting teaching and learning activities, the operation of KG and maintenance of the standard of education service.
(d) Schools should not transfer any funds, including subsidies and surplus, in whatever form, to any organizations including their sponsoring bodies.
(e) Schools should properly disclose all related party3transactions and their outstanding balances as required in relevant EDB’s circulars / directives in Note 4 of Statement 6 at Annex 1, including those related party transactions that had been reported in their 2017/18 fee revision application. Please refer to Annex 4 for definition.
(f) Schools should draw their Auditors’ attention to the strict certification requirements as set out in the reference notes for Auditors at Annex 5 prior to the commencement of audit.
(g) Schools should note that as set out at Annex 5, Auditors are required to send to EDB a copy of the management letter, if any, they issued to their School Supervisors on the weaknesses they observed in the internal control of KGs.
EDB may require KGs and their Auditors to provide supplementary information, if necessary.
Enquiries
8. For enquiries, please contact Accounting Officer I (Management Services)1 at 2892 6269.
( Ms Clarice LI )
for Permanent Secretary for Education
Encl.
Notes :
1. All income and expenditure relating to trading operations that are collected under EDB Circular No. 16/2013 should be analyzed in Statement 4 at Annex 1.
2. For registration fees, application fees and meal charges, KGs should obtain the prior written approval of EDB before collection of or making adjustments to these fees in accordance with the Education Regulations. In addition, income generated from activities ancillary to school’s operation NOT collected from students should be reported in Note 5 of Statement 6 at Annex 1.
- 1 -
Annex 1 Name of School : ____________________________________________________________
School type : *KG / KG-cum-CCC [*Please delete whichever is inappropriate]
*Redeeming / Not redeeming voucher subsidy under PEVS
*CCCSS / Non-CCCSS
*SME / Non-SME
*Rent Reimbursement / Non-Rent Reimbursement
ACCOUNTS FOR THE YEAR ENDED _________________2018 CONTENTS
Statement No. Particulars Page
- School Supervisor's Certificate 2
- Auditor’s Report 3
1 Income and Expenditure Account (for KGs if Statement 1A below is inapplicable)
4-5
1A Income and Expenditure Account (for KGs redeeming voucher subsidy under PEVS with operating classes of both local & non-local curriculum)
6-7
2 Balance Sheet 8
3 Statement of Child Care Centre Subsidy Scheme and Subsidy for Manpower Enhancement (if applicable)
9
4 Statement of Trading Operations 10
5 Statement of Donation Income 11
6 Notes to the Accounts 12-15
- 2 -
Name of School : ____________________________________________________________
ACCOUNTS FOR THE YEAR ENDED________________ 2018
SCHOOL SUPERVISOR'S CERTIFICATE
I hereby certify that the information and explanations given in *Statements 1/1A, 2, 3, 4, 5 and 6 in the Accounts of the School for the year ended _________________2018 are true and correct.
Signed : _____________________
(School Supervisor) Name of School Supervisor : _____________________
Date : _____________________
* Please delete whichever is inappropriate
Please stamp School Chop
- 3 -
Name of School : _________________________________________________________
ACCOUNTS FOR THE YEAR ENDED_________________2018
AUDITOR’S REPORT
Signed : _____________________
(Auditor)
Name of Auditor : _____________________
Date : _____________________
Please stamp Auditor’s Chop
- 4 - Statement 1
(Page 1 of 2)
For KGs/KG-cum-CCCs (i) redeeming voucher subsidy under PEVS and/or (ii) receiving (a) CCCSS, and/or (b) SME and/or (c) Rent Reimbursement
(For those KGs/KG-cum-CCCs redeeming voucher subsidy under PEVS with operating classes of both local and non-local curriculum, they should prepare Statement 1A instead.)
Name of School : ________________________________________________________________________
School type: *KG/KG-cum-CCC [*Please delete whichever is inappropriate.]
*Redeeming / Not redeeming voucher subsidy under PEVS
INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED_________________2018
$
Current Year
$
Previous Year
$
Remarks (or Notes) INCOME
School Fees - from parents - from PEVS
- from Kindergarten and Child Care Centre Fee Remission Scheme
Less : Fee Remission (financed by school) Subsidy received under the
Child Care Centre Subsidy Scheme Subsidy for Manpower Enhancement Reimbursement of Government Rent Reimbursement of Rates
Reimbursement of Rent Other Income (Note 1)
Per Statement 3
Per Statement 6 (item 5)
TOTAL INCOME (a) EXPENDITURE (Note 2)
Salaries
- Teaching Staff (including Principal) - Non-teaching Staff
Employer's Contribution to Provident Fund Scheme - Teaching Staff (including Principal)
- Non-teaching Staff
Severance Pay/Long-service Pay - Teaching Staff (including Principal) - Non-teaching Staff
Supervisor's Remuneration Government Rent
Rates Rent
Depreciation - School Premises
- Furniture/Equipment/Fixtures/Fittings - Computer Hardware and Software - Others
Per Statement 6 (item 1)
(to be continued)
- 5 - Statement 1
(Page 2 of 2)
Name of School : _________________________________________________________
$
Current Year
$
Previous Year
$
Remarks (or Notes) Major Repairs and Maintenance (for items costing $8,000 or
above each)
Minor Repairs and Maintenance (for items costing below
$8,000 each) Audit Fee
Other Expenditure (Note 3) Per Statement 6
(item 3)
TOTAL EXPENDITURE (b) Surplus/(Deficit) from the operation [(a) – (b)]
Profit/(Loss) from Trading Operations (Note 4) Donation Income (Note 5)
SURPLUS/(DEFICIT) FOR THE YEAR
ACCUMULATED SURPLUS/(DEFICIT) BROUGHT FORWARD FROM PREVIOUS YEAR
PRIOR YEAR ADJUSTMENT (Please specify the nature) TRANSFER TO/(FROM) RESERVE (Note 6)
Per Statement 4
Per Statement 5
Per Statement 6 (item 6) ACCUMULATED SURPLUS/(DEFICIT) CARRIED
FORWARD TO NEXT YEAR
Note
1. Please provide breakdowns for “Other Income” in Statement 6.
2. Please observe the guiding principles on scope of expenditure at Annex 3.
3. Please provide breakdowns for “Other Expenditure” in Statement 6.
4. For KGs with trading operations such as sale of school items and provision of paid services, please provide details of such income and corresponding costs in Statement 4.
5. For KGs with donations received, please provide details of income from donation and corresponding expenditure in Statement 5.
6. Please specify the nature of surplus transfer to/(from) reserve e.g. school development for educational purpose in Statement 6.
- 6 - Statement 1A
(Page 1 of 2)
For KGs/KG-cum-CCCs redeeming voucher subsidy under PEVS with operating classes of both local and non-local curriculum
Name of School : _______________________________________________________________________________
School type: *KG/KG-cum-CCC [*Please delete whichever is inappropriate.]
INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED_________________2018
Current Year
$
Previous Year
$
Remarks (or Notes) Local
Curriculum Classes
Non-Local Curriculum Classes
Total Total
INCOME
School Fees - from parents - from PEVS
- from Kindergarten and Child Care Centre Fee Remission Scheme
Less : Fee Remission (financed by school) Subsidy received under the
Child Care Centre Subsidy Scheme Subsidy for Manpower Enhancement Reimbursement of Government Rent Reimbursement of Rates
Reimbursement of Rent Other Income (Note 1)
Per
Statement 3
Per
Statement 6 (item 5) TOTAL INCOME (a)
EXPENDITURE (Note 2)
Salaries
- Teaching Staff (including Principal) - Non-teaching Staff
Employer's Contribution to Provident Fund Scheme - Teaching Staff (including Principal)
- Non-teaching Staff
Severance Pay/Long-service Pay - Teaching Staff (including Principal) - Non-teaching Staff
Supervisor's Remuneration Government Rent
Rates Rent
Depreciation - School Premises
- Furniture/Equipment/Fixtures/Fittings - Computer Hardware and Software - Others
Per
Statement 6 (item 1)
(to be continued)
- 7 - Statement 1A
(Page 2 of 2) Name of School : _________________________________________________________
Current Year
$
Previous Year
$
Remarks (or Notes)
Local Curriculum
Classes
Non-Local Curriculum Classes
Total Total
Major Repairs and Maintenance (for items costing
$8,000 or above each)
Minor Repairs and Maintenance (for items costing below $8,000 each)
Audit Fee
Other Expenditure (Note 3) Per Statement 6
(item 3)
TOTAL EXPENDITURE (b) Surplus/(Deficit) from the operation [(a) – (b)]
Profit/(Loss) from Trading Operations (Note 4) Donation Income (Note 5)
SURPLUS/(DEFICIT) FOR THE YEAR
ACCUMULATED SURPLUS/(DEFICIT) BROUGHT FORWARD FROM PREVIOUS YEAR
PRIOR YEAR ADJUSTMENT (Please specify the nature) TRANSFER TO/(FROM) RESERVE (Note 6)
Per Statement 4 Per Statement 5
Per Statement 6 (item 6)
ACCUMULATED SURPLUS/(DEFICIT) CARRIED FORWARD TO NEXT YEAR
Note
1. Please provide breakdowns for “Other Income” in Statement 6.
2. Please observe the guiding principles on scope of expenditure at Annex 3.
3. Please provide breakdowns for “Other Expenditure” in Statement 6.
4. For KGs with trading operations such as sale of school items and provision of paid services, please provide details of such income and corresponding costs in Statement 4.
5. For KGs with donations received, please provide details of income from donation and corresponding expenditure in Statement 5.
6. Please specify the nature of surplus transfer to/(from) reserve e.g. school development for educational purpose in Statement 6.
- 8 - Statement 2
For KGs/KG-cum-CCCs (i) redeeming voucher subsidy under PEVS and/or (ii) receiving (a) CCCSS, and/or (b) SME and/or (c) Rent Reimbursement
Name of School : _____________________________________________________________________________
School type: *KG/KG-cum-CCC [*Please delete whichever is inappropriate]
*Redeeming / Not redeeming voucher subsidy under PEVS
BALANCE SHEET AS AT _________________2018
$
Current Year
$
Previous Year
$
Remarks (or Notes) NON-CURRENT ASSETS
Fixed Assets
Other Non-Current Assets (please specify) TOTAL NON-CURRENT ASSETS
Per Statement 6 (item 1)
CURRENT ASSETS
Stock of Exercise Books, Stationery and Uniform etc.
Sundry Debtors and Prepayments Rental & Utility Deposit
Cash at bank and in hand
Other Current Assets (please specify)
Per Statement 4
TOTAL CURRENT ASSETS CURRENT LIABILITIES
School Fees Received in Advance Bank Overdraft
Sundry Creditors and Accrual
Other Current Liabilities (please specify) TOTAL CURRENT LIABILITIES
NET CURRENT ASSETS/(LIABILITIES)
TOTAL ASSETS NET OF CURRENT LIABILITIES REPRESENTED BY :
RESERVE (please specify)
ACCUMULATED SURPLUS/(DEFICIT) LONG TERM LIABILITIES
Bank Loan
Other Long Term Liabilities (please specify)
Per Statement 1/1A
- 9 - Statement 3 For KG-cum-CCCs receiving CCCSS and/or SME
Name of School : ________________________________________________________________
STATEMENT OF CHILD CARE CENTRE SUBSIDY SCHEME AND SUBSIDY FOR MANPOWER ENHANCEMENT
FOR THE YEAR ENDED _________________2018 Current
Year
$
Previous Year
$
Remarks (or Notes) Income
Subsidy received under the Child Care Centre Subsidy Scheme (Note 1)
Per Statement
* 1 / 1 A Subsidy for Manpower Enhancement (“SME”) (Note 2)
Total Income
Expenditure
Salary and provident fund/mandatory provident fund (Note 1&2)
- Child care supervisor's ("CCS's") salaries - Child care workers' ("CCW's") salaries
- Employer's Contribution to Provident Fund Scheme / Mandatory Provident Fund Scheme for CCSs and CCWs
Total Expenditure
Surplus(Note 3)/(Deficit)
Surplus refundable to Education Bureau ("EDB") / (Deficit) for the period
Surplus refundable to Social Welfare Department ("SWD") / (Deficit) for the period
Total Surplus/(Deficit)
*Please delete whichever is inappropriate Note
1. According to EDBC No. 3/2008, the subsidy under the Child Care Centre Subsidy Scheme (CCCSS) should be spent solely on CCS's / CCW's salaries and Provident Fund / Mandatory Provident Fund expenses.
2. According to SWD's notification letter issued to schools, the SME should be spent solely on CCS's / CCW's salaries and Provident Fund / Mandatory Provident Fund expenses and it has to be spent in the school year to which it is granted.
KG-cum-CCCs withdrawn from Free Quality Kindergarten Education Scheme should continue to report any income and expenditure under SME.
3. Any unspent amount of the allocation will be clawed back by the Government of the Hong Kong Special Administrative Region ("the Government") after the review of the annual audited accounts. If the CCC service of the aided KG-cum-CCC is terminated, the entire unspent subsidy based on the audited accounts as at the date of closure will be clawed back by the Government. The surplus from CCCSS and SME will be calculated on pro-rata basis and returned to EDB and SWD accordingly.
- 10 -
Statement 4
For KGs/KG-cum-CCCs (i) redeeming voucher subsidy under PEVS and/or (ii) receiving (a) CCCSS, and/or (b) SME, and/or (c) Rent Reimbursement
Name of School : ________________________________________________________________________
STATEMENT OF TRADING OPERATIONS
FOR THE YEAR ENDED ______________________________ 2018
School Bus Text books Exercise
Books School
Uniform School
Bag(s) Beddings
Activities outside regular school hours
Stationery
Teaching/
Learning Materials
Snack/Food/
Refreshment Others (Please specify)
Total
(Notes 1 & 4) (Notes 1 & 4) (Notes 1 & 4) (Notes 1 & 4) (Notes 1 & 4) (Notes 1 & 4) (Notes 1 & 4) (Notes 1 & 4) (Notes 1 & 4) (Notes 1 & 4) (Notes 1 & 4)
$ $ $ $ $ $ $ $ $ $ $ $
Income (a)
Less: Cost of Sales (b)
Opening Stock
Add : Purchases Other Expenses (please specify)
Less : Closing Stock
Profit/(Loss) for the year (c) = (a) – (b)
(Transfer to Income and Expenditure Account)
Profit/(Loss) as a % of cost (c)/(b) (Notes 2 & 3)
Notes
1. Please state the description of the trading operations and put each activity under SEPARATE columns. Sale of textbooks should be shown as a separate activity.
2. The profit from the sale of exercise books, schools uniforms, stationery, equipment and other school items (other than textbooks) / provision of paid services should be limited to 15% of the cost price / total cost involved according to EDBC No.16/2013.
3. No profit would be generated from sale of textbooks. For details, please refer to EDBC No. 16/2013.
4. Any discount or block sum of money received from trading operators / suppliers should be entered into school accounts as an item of income.
- 11 - Statement 5
For KGs/KG-cum-CCCs (i) redeeming voucher subsidy under PEVS and/or (ii) receiving (a) CCCSS, and/or (b) SME, and/or (c) Rent Reimbursement
Name of School : ________________________________________________________________________
STATEMENT OF DONATION INCOME FOR THE YEAR ENDED_________________2018
Current Year
$
Previous Year
$
Remark (or Notes) DONATION INCOME
EXPENDITURE (PLEASE SPECIFY)
- - - - - - - - -
TOTAL EXPENDITURE NET BALANCE
(Transfer to Income and Expenditure Account)
Expenditure Account)
Per Statement
*1/1A
*Please delete whichever is inappropriate
- 12 - Statement 6
(Page 1 of 4) For KGs/KG-cum-CCCs (i) redeeming voucher subsidy under PEVS and/or (ii) receiving (a) CCCSS, and/or (b) SME and/or (c) Rent Reimbursement
Name of School : ________________________________________________________________________
NOTES TO THE ACCOUNTS 1. FIXED ASSETS
School Premises
$
Furniture / Equipment / Fixtures/Fittings
$
Computer Hardware and
Software
$
Others (Please specify)
$
Total
$ At Cost
Balance as at ___________ _________ ______________ ____________ __________ _________
Add: Additions During the
Year (Remark 1) _________ ______________ ____________ __________ _________
Less: Disposal During the
Year _________ ______________ ____________ __________ _________
Balance as at ___________
======== ============= =========== ========= ========
Accumulated Depreciation
Balance as at ___________ _________ _______________ ____________ __________ _________
Add: Depreciation for the
Year _________ _______________ ____________ __________ _________
Less: Depreciation for Disposed Items
for the year _________ _______________ ____________ __________ _________
Balance as at ___________
========= ============== =========== ========= ========
Net Book Value
Balance as at ___________
(beginning of the year)
========= ============== =========== ========= ========
Balance as at ___________
(end of the year)
========= ============== =========== ========= ========
Threshold amount (Remark 2)
========= ============== =========== =========
Depreciation rate (%)
========= ============== =========== =========
Remarks
1 For all KGs/KG-cum-CCCs redeeming voucher subsidy under PEVS, details must be provided in Note 2 to the Accounts.
2 Please provide the threshold amount (i.e. the amount where at or above which the relevant expenditure would be treated as fixed asset) for each type of assets.
(to be continued)
- 13 - Statement 6
(Page 2 of 4) Name of School : ________________________________________________________________________
NOTES TO THE ACCOUNTS 2. DETAILS OF ADDITIONS OF FIXED ASSETS DURING 2017/18
List of fixed assets by nature and item
Purchase/
commission date
Cost
$
1. School Premises (please specify)
1.1
1.2
:
Total:
2. Furniture/equipment/fixtures/fittings (please specify)
2.1
2.2
:
Total:
3. Computer hardware & software (please specify) 3.1
3.2 :
Total:
4. Others (please specify)
4.1
4.2
:
Total:
(Per Note 1 to the Accounts)
(to be continued)
- 14 - Statement 6
(Page 3 of 4) Name of School : ________________________________________________________________________
NOTES TO THE ACCOUNTS 3. OTHER EXPENDITURE
Current Year Previous Year
$ $ Local Non-Local Total Curriculum Curriculum
Expenses on meal preparation
Furniture and equipment and teaching aids other than those included in the fixed assets Water
Electricity
Telephone, fax line and internet service charges Cleaning
Printing and stationery Teaching consumables Insurance
First aid and fire safety equipment
Transportation fees for school administration purposes
Expenses on regular learning activities for all students
Postage
Publications for school use
Student handbook, profiles, graduation certificates and identity cards
Advertisement Bank interest Bank charges
Newspapers and magazines Others (please specify)
Classes Classes
__________ ___________ _________
========= ========== ========
4. RELATED PARTY TRANSACTION(S)
Current Year Previous Year
$ $ Amount due from related party(ies) (please specify)
- -
Amount due to related party(ies) (please specify) -
-
Payment to related party(ies) (please specify) -
-
Receipt from related party(ies) (please specify) -
-
(to be continued)
- 15 - Statement 6
(Page 4 of 4) Name of School : ________________________________________________________________________
NOTES TO THE ACCOUNTS
5. OTHER INCOME (Remark 3)
Current Year Previous Year
$ $ Local Non-Local Total Curriculum Curriculum
Classes Classes Meal Charges
Application Fee / Registration Fee Subsidies from School Sponsoring Body Course Fee Refund to Teachers
Receipt from Designated Grants (e.g. Subsidy from the Environment and Conservation Fund) Bank Interest Income
Insurance Compensation Others (please specify)
- - -
__________ __________ __________
========= ========= =========
6. TRANSFER TO / (FROM) RESERVE (PLEASE SPECIFY)
Current Year Previous Year
$ $ Local Non-Local Total Curriculum Curriculum
Classes Classes -
- - -
__________ __________ __________
========= ========= =========
Remarks
3 Income generated from trading operations, if any, should NOT be reported under “Other Income”. The details of such income and corresponding costs should be provided in Statement 4.
- 1 -
Annex 2 Procedures for Submission of Softcopy of Audited Accounts
Through School Portal (1) Login using the School Portal Account
(2) Select the appropriate option from Part (II) of the menu
(to be continued)
- 2 -
Annex 2 Procedures for Submission of Softcopy of Audited Accounts
Through School Portal (3) Select Option 1 for downloading the template of Audited Accounts.
Click and download the “Template” for the year and language chosen.
(4) Select Option 2 for the submission of file.
(to be continued)
- 3 -
Annex 2 Procedures for Submission of Softcopy of Audited Accounts
Through School Portal
(5) Click the “Browse” button to locate the softcopy of the audited accounts.
(6) For schools having more than 1 branch under the same school number, please select different values (say
"B", "C", "D" etc. for each individual Branch School other than the Main School). Please submit separate files for the Main School and the Branch School.
(7) Click “Submit” to send the file.
(IMPORTANT: Please only use the Excel template provided by EDB. The submission file format should be
“School No. + Branch ID (Default “A”) + date (ddmmyy). For example, 123456A050313.xls.
Only file extension of “.xlsm” is allowed.)
- 1 -
Annex 3 Guiding Principles on Scope of Expenditure
for Kindergartens under the Pre-primary Education Voucher Scheme Aim
The following paragraphs set out some guiding principles on the scope of expenditure for kindergartens (KGs) under the Pre-primary Education Voucher Scheme (PEVS).
Guiding Principles
2. In the use of resources from school fees including the fee subsidy under PEVS, KGs should be prudent and always put students’ interest as the first priority. KGs should have sound financial planning and good budgeting in deploying their resources and should ensure that expenditure incurred is reasonable and necessary. Expenditure of KGs should be basically devoted to supporting teaching and learning activities, the operation of the KG and maintenance of the standard of education service. Details of the scope of expenditure are listed below:
(a) Salaries (including payment for supply teachers), provident fund, mandatory provident fund, severance or long service payment of teaching and non-teaching staff employed
(b) The remuneration of school supervisors
(c) Rent and management fees, rates and government rent for the KG/ KG-cum-CCC premises (d) Furniture and equipment for school and education purposes
(e) Teaching aids such as library books, reference materials and worksheets for teachers and students (f) Expenses on repairs, maintenance and improvement works of the KG/ KG-cum-CCC premises
including installation of air-conditioners, double-glaze windows and exhaust fans, maintenance contract, inspection fees for maintaining fire, gas, electrical installation and building safety
(g) Water and electricity (including air-conditioning) charges, telephone line, fax line and internet service charges
(h) Cleaning fees (including cleaning contract and the provision of cleaning facilities to students) (i) Expenses on printing, paper, teachers’ stationery and other consumables for teaching activities (j) Postage charges and publications
(k) Insurance premium and expenses on first aid and fire safety equipment (l) Audit fees and other service charges in connection with school administration
(to be continued)
- 2 -
Annex 3
(m) Transportation fees for school administration purposes
(n) Expenses on regular learning activities for all students, conducted either inside or outside the school premises (these should include expenses for birthday parties, graduation ceremony, school outing, picnics and visits.)
(o) Items such as student handbooks, profiles, student portfolios, graduation certificates and identity cards, etc which are necessary for the operation of the school
(p) Other expenses directly related to the teaching activities, school operation and maintenance of the standard of education service for educational purposes
3. Additional Points to Note:
3.1 For KGs redeeming voucher subsidy under PEVS operating classes of both local and non-local curriculum, separate ledgers should be prepared to report all income and expenditure in respect of the classes for each of the two curriculums.
3.2 All income and expenditure relating to trading operations such as sale of school items that are collected under Education Bureau (EDB) Circular (C) No. 16/2013 should be analyzed as per the format in Statement 4 at Annex 1.
3.3 As stipulated in the terms and conditions of PEVS for NPM KGs, the PEVS NPM KGs shall not transfer the surplus, in whatever form, to any of their sponsoring bodies or other organizations.
Expenditure items not related to paragraph 2 above or not basically devoted to teaching and learning activities should be disallowed.
- 1 -
Annex 4 Definition of Related Party
A related party is a person or entity that is related to the kindergarten preparing its financial statements.
(a) A person or a close member of that person’s family Note 1 is related to a kindergarten if that person:
(i) has control or joint control over the kindergarten;
(ii) has significant influence over the kindergarten; or
(iii) is a member of the key management personnel of the kindergarten or of a sponsoring body of the kindergarten.
(b) An entity is related to a kindergarten if any of the following conditions applies:
(i) The entity and the kindergarten are members of the same group (which means that each parent, subsidy and fellow subsidiary is related to the others).
(ii) One entity is an associate or joint venture of the other entity (or of a member of a group of which the other entity is a member).
(iii) Both entities are joint ventures of the same third party.
(iv) One entity is a joint venture of a third party and the other entity is an associate of the third party.
(v) The entity is a post-employment benefit plan for the benefit of employees of either the kindergarten or an entity related to the kindergarten. If the kindergarten is itself such a plan, the sponsoring employers are also related to the kindergarten.
(vi) The entity is controlled or jointly controlled by a person identified in (a).
(vii) A person identified in (a)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).
--- Note:
1. Close members of the family of a person are those family members who may be expected to influence, or be influenced by, that person in their dealings with the entity and include:
(a) that person’s parents, children, spouse or domestic partner;
(b) children of that person’s spouse or domestic partner; and
(c) dependants of that person or that person’s spouse or domestic partner.
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Annex 5 Reference Notes
for Auditors of Kindergartens (KGs) / Kindergarten-cum-Child Care Centres (KG-cum-CCCs) redeeming voucher subsidy under Pre-primary Education Voucher Scheme (PEVS) and /or received
subsidies under Child Care Centre Subsidy Scheme (CCCSS) and/or Subsidy for Manpower Enhancement (SME) and / or Rent Reimbursement
in the 2017/18 School Year
Education Bureau Circular (EDBC) No. 6/2011, No. 3/2008 and No. 2/2004 respectively require KGs/KG-cum-CCCs joining PEVS and/or in receipt of CCCSS and/or rent reimbursement to submit their audited accounts, with the subsidy duly reflected. KGs joining PEVS in the 2016/17 school year but not joining the new kindergarten education scheme in the 2017/18 school year are also required to comply with the terms and conditions of PEVS as appropriate until the end of operation of all eligible classes or all existing eligible students have left the KG concerned, whichever is earlier, as stipulated in EDBC No. 7/2016.
The accounts must be audited by Certified Public Accountants (practising) registered under the Professional Accountants Ordinance. Note 1 This requirement is laid down in order to enable the Permanent Secretary for Education to satisfy that the schools have properly applied the subsidies received from the government to the purposes for which they were paid.
2. Auditors should submit an Auditor’s Report on the school accounts, and EACH statement to the accounts should be stamped with the identification chop of the Auditors. The Auditor’s Report should state whether in the Auditor’s opinion -
(a) the accounts give a true and fair view of the state of the school's affairs as at the balance sheet date and of its results for the accounting year then ended; and
(b) the school has used the government subsidies in accordance with the rules and ambits as promulgated in the EDBC No. 6/2011 (in particular all KGs/KG-cum-CCCs joining PEVS shall NOT transfer the surplus, in whatever form, to any of their sponsoring bodies or other organizations), EDBC No. 3/2008, EDBC No. 2/2004, relevant letters, circulars, circular memoranda and guidelines (in particular the guiding principles on scope of expenditure at Annex 3) issued by the Education Bureau.Note 2
3. The Auditors should draw the attention of the School Supervisors to weaknesses in internal controls discovered during the course of their audit and that they should report items which are considered material in a letter (i.e. management letter) with recommendations for improvement. The Auditors should also send a copy of the management letter to EDB for information.
4. If the Auditors are of the opinion that proper books of accounts have not been kept by the school, or if the balance sheet and income and expenditure account are not in agreement with the books of accounts, or if the Auditors are not able to obtain all the information and explanations which, to the best of their knowledge and belief, are necessary for the purpose of their audit, they should make appropriate qualifications in their reports.
--- Notes:
1. This means “certified public accountants (practising)” with effect from the commencement of the Professional Accountants (Amendment) Ordinance 2004 on 8 September 2004. “Certified public accountant (practising)” means a certified public accountant holding a practising certificate.
2. Auditors should note that “Code of Aid” is not applicable to Kindergartens.