Preparing School Budget /

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Guidance Notes for

Preparing School Budget / Fee Revision Application

of DSS Schools for the 2021/22 s.y.

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Call letter (with Excel file template) issued through CDS on 3 March 2021

INCOMPLETE information submitted may lead to DELAY in processing the

applications

Deadline for submission of application:

30 April 2021

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WITHOUT

To provide school’s financial position in the format of –

Appendix 1:

Income and expenditure statement under operating reserve

Note: The Income and Expenditure Statement of private class, if any, should not be included in Appendix 1

Expenditure under designated reserves

Estimated number of classes, enrolment and school fees

Appendix 7 (applicable to schools with boarding section only)

Certification by school supervisor with school chop

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Proposing

Complete Declaration by School Supervisor (with school chop) at Appendix 2

Provide details in

a) Schedule 1:

- Information Sheet for Parent Consultation b) Schedule 2a:

- Income and Expenditure Statement under Operating Reserve - Expenditure under Designated Reserves

- Balance for Grandfathered Reserve and Reserve for Construction, Maintenance and Upgrading of Above-standard Facilities

- Net Book Value of Additional School Buildings Financed by Non-government Funds in Operating Reserve

c) Schedule 2b:

- Breakdown of Repairs and Maintenance Expenses (only for total amount > $1 million) - Breakdown of Other Operating Expenses

d) Schedule 2c:

- No. of Classes, Enrolment, Fee Income and DSS Subsidy

- Fee Revision Percentage of Local Students / Non-local Students e) Schedule 2d:

- Provision for Fee Remission and Scholarship Scheme

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Proposing

Complete and submit documents as required in Appendices 3 & 4 (Parent/ PTA consultation)

For schools having boarding section:

Appendix 7:

- Income and Expenditure Statement - Projected Enrolment and Fee Income

Private class (if any) should not be included

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Price change (both salary and non-salary) is the sole factor taken into account to determine the level

of the threshold percentage for full parent consultation effective from the 2020/21 school

budget / fee revision exercise

Enhance schools’

accountability in seeking parents’ consent in school

fee revision

Streamline procedures in vetting applications

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Threshold for parent consultation:

2.5% for 2021/22 Fee Revision Exercise

Parent consultation and consent from the majority of the parents concerned are required for:

schools applying for fee increase higher than the threshold (i.e. > 2.5%); or

schools with their accumulated total operating reserve as at 31 August 2020 exceeding the annual operating expenses of the 2019/20 school year as reflected in the 2019/20 audited accounts.

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Schools are required to :

1. send to parents a printed letter / circular attached with the financial information of the school [Please refer to “Extract of Appendix 3” on Slide 9; &

“Sample” on Slide 10] and an “Acknowledgement Slip”

[Please refer to “Appendix 4” on Slide 11] with space for parents’ views / comments as required in the call letter; (schools are encouraged to provide the

financial information to parents in Chinese) and 2. submit to EDB a copy each of the printed letter /

circular to parents with the information on school’s financial situation and the acknowledgement slip.

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Parent Consultation

Essential Information to be included in the Financial Situation of the School

Schools intending to apply for fee increase must provide the following information to parents / Parent Teacher Association (PTA) in the consultation process. The information provided should be clear, sufficient and correct for easy understanding of parents.

1. Services / facilities that lead to fee increase in the 2021/22 school year, with a breakdown of financial implicationsby items

e.g. (i) Hire of additional teachers for the implementation of small-class teaching - $xxxxx (ii) New programme on xxxxx - $xxxxx

2. Total additional funds needed for all the items that lead to fee increase

3. Estimated deficit if the school fee is kept unchanged for the 2021/22 school year according to the budget for the 2021/22 school year

4. Estimated surplus / deficit (where appropriate) after the proposed school fee increase according to the budget for the 2021/22 school year

5. The accumulated total operating reserve, the amount in the Reserve for Construction, Maintenance and Upgrading of Above-Standard Facilities and the amount of Grandfathered Reserve (if any) of the school (each in terms of the number of months of the annual operating expenses), as reflected in the Audited Accounts for the 2019/20 school year

Extract of Appendix 3

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SAMPLE ABC School

Essential information

Item HKD

Services that lead to fee increase in the 2021/22 school year :

(i) Maintain a low teacher-student ratio for the implementation of small-class teaching on core subjects

(ii) Continue to provide academic counselling and support

(iii) Continue to provide guidance and counselling support on career planning and further study

1. 700,000

48,000 42,000 Total: 790,000

Estimated deficit if the school fee is kept unchanged for the 2021/22 school year

2. 1.5 millions

Estimated deficit/ surplus after the proposed school fee increase for 2021/22 school year

3. 0.5 million

4. The operating reserve as at 31 Aug 2020 (audited)

This amount includes the 0.6 months Net Book Value of additional buildings. After excluding the NBV, the operating reserve equals 2.0 months annual operating expenses.

2.6 months

5. The amount in the Reserve for Construction, Maintenance and

Upgrading of Above-Standard Facilities as at 31 Aug 2020 (audited)

This amount includes the 1.0 month Net Book Value of additional buildings. After excluding the NBV, the reserve equals 0.5 month annual operating expenses.

1.5 months

6. Nil for Grandfathered Reserve

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Student's

Name: Parent's Signature:

Class: ( ) Parent's Name:

Date:

2. My views on the event of the proposed school fee increase in the 2021/22 school year are as follows (Optional):

1. I acknowledge receipt of your letter of xx March 2021 informing me the proposed school fee increase for the 2021/22 school year and the financial situation of the school.

Appendix 4

SAMPLE

Parent Consultation Acknowledgement Slip

[Please return this slip on or before xx April 2021]

Proposed school fee increase for the 2021/22 school year

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If proposed fee increase ≤ 2.5% with accumulated total operating reserve ≤ annual operating expense (2019/20), Parent Teacher Associations (PTA) should be consulted as a basic requirement.

For consultation with PTA, schools are required to provide PTA with the information on school’s financial situation (same as full parent consultation).

Schools are also required to submit to EDB a copy of the information on school’s financial situation which has been provided to PTA. 12

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Information Sheet

(to be completed by schools applying for fee increase)

4. Referring to the section on parent consultation in EDB's call letter of [ ] March 2021 and Notes to Part 4 of Schedule 1 (p.5 of 5),

A.

B.

(To be cont'd)

my school issued a consultation letter/circular to all parents on , copies of the letter/circular with the information on school's financial situation and the acknowledgement slip are attached. Concerns of parents have been addressed. Details are provided on pages 2 to 3 of Schedule 1.

my school consulted the Parent Teacher Association (PTA)on , copy of the information on financial situation of the school provided to the PTA is attached. Concerns of parents have been addressed. Details are provided on pages 2 to 3 of Schedule 1.

13 Extract of Schedule 1 (P.1 of 5)

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(Part 4 Cont'd)

A. Consultation process: (please continue on separate sheets if necessary)

[If a consultation meeting has been conducted, please provide the details as well.]

B. Consultation results: (please continue on separate sheets if necessary)

No. of reply slips received from parents:

Total no. of students involved in the consultation:

C. How parents' concerns have been addressed:

(please continue on separate sheets if necessary)

(To be cont'd)

Schedule 1 (P.2 of 5)

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Example 1

Proposing fee increase at S1 in secondary-cum- primary DSS schools

Parent consultation at least with the PTA of the primary school section should be conducted

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Example 2

Proposing fee increase at entry levels i.e. P1 or S1 Parents of new applicants and successful applicants should be informed of the school fee arrangements by means of application form and offer letter respectively. (If not feasible, at least by offer letter)

(also applicable to fee increase at S4 in senior secondary schools operating senior secondary classes only )

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Example 3

Proposing fee increase at P1 (30%), P3 (10%), P4 (10%)

& P5 – P6 (Nil)

It is required to conduct full consultation with parents at the affected levels (i.e. P1 to P3) and follow the same requirements in Example 2.

If there is a proposed fee increase at P1 or S1 level only (i.e. no proposed fee increase at other levels) OR the proposed fee increase % at P1 or S1 level is much higher than that at other level(s), justifications should be provided to show that there is a genuine need for the differential school fee, e.g. additional services are provided for P1 or S1 students only.

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Schools are also required to provide the following information in accordance with the 2019/20 Audited Accounts:

Accumulated Operating Reserve balance

Reserve for Construction, Maintenance and

Upgrading of Above-standard Facilities (if any)

Grandfathered Reserve (if any)

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(Part 4 Cont'd)

D. Justifications for fee increase: (please continue on separate sheets if necessary)

5. Reserve for Construction, Maintenance and Upgrading of Above-standard Facilities

Are the funds of the Reserve expended according to the plan approved by the School Management Committee (SMC)/ Incorporated Management Committee (IMC)? (Please tick A or B.)

A.

B.*

my school has spent the Reserve according to the deployment plan approved by the SMC/IMC.

my school has NOT spent the Reserve according to the deployment plan approved by the SMC/IMC.

* If B is checked, please provide justifications (if any) for not spending according to the plan.

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Schedule 1 (P.3 of 5)

(Part 5 is applicable only to schools with the following Reserve)

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(Part 6 is applicable only to schools with the following Reserve) 6. Grandfathered Reserve

Available balance of the Grandfathered Reserve (i.e. the amount left after excluding the Net Book Value of fixed assets recorded under this Reserve):

$

Are the funds of the Reserve expended as planned? (Please tick A or B.)

A.

B.*

* If B is checked, please provide justifications (if any) for not spending as planned.

my school has spent the Reserve according to the deployment plan approved by the EDB.

my school has NOT spent the Reserve according to the deployment plan approved by the EDB.

7. In case of enquiries, please contact the following officer of my school :

Name : _____________ Post: _____________ Tel No.: _____________

(To be cont'd)

Schedule 1 (P.4 of 5)

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Provisional projected DSS unit subsidy rates for the budget school year (by taking average of the

percentage change of the projected DSS unit subsidy rates in the past 5 years) is provided for budgeting

purpose w.e.f the 2020/21 exercise

To facilitate DSS schools’ making a more realistic budgeting in respect of the school income from

DSS subsidy

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The Provisional Projected DSS Unit Subsidy Rates for the 2021/22 s.y. will be adopted for projection of the income of DSS subsidy, provision of fee remission and scholarship scheme and school fees of non-local students for “Budget” (i.e. “2021/22 Budget”).

Note: The Provisional Projected DSS Unit Subsidy Rates serve as a reference for budgeting purpose and are subject to adjustment when this Bureau computes the 2021/22 projected unit subsidy rates after the 2020/21 school year.

Level Of school age at 16

years or above Of school age below 16 years

P1-6 HK$ 73,067 HK$ 70,145

S1-3 HK$ 74,947 HK$ 72,698

S4-6 HK$ 87,564 HK$ 84,937

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For the operation of new non-local curriculum classes with different fees from local-curriculum at S5 level, it is not counted as fee increase at the class level.

For a school applying for different fee increases at different class levels, if there is proposed fee increase at more than 2.5% at one or more class level(s), the school is classified as applying for fee increase higher than the threshold and is thus required to conduct full parent consultation at the affected level(s).

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Scenario 1 – if prior written notification has been given to parents that the same approved school fee* of the preceding class level will be charged when their children proceed to the next higher class level but afterwards fee revision is proposed, then

* school fee is subject to EDB’s approval

Scenario 2 - if no prior written notification has been provided to parents that the same approved school fee level of the preceding class level will be charged when their children proceed to the next higher class level, then

Fee increase % - By Cohort of Students

Fee increase % - By Class Level

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Example Extract of Appendix 5 (p. 1 of 2)

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Non-local students (except those specified in EDBC No.

19/2019) are not eligible for DSS subsidy.

In order to ensure no cross-subsidisation of government funds to these students, DSS schools should set the school fee for non-local students (NOT eligible for DSS Subsidy) for the 2021/22 school year not less than the sum as follows:

School Fee for Local Students +

2021/22 Provisional Projected DSS Unit Subsidy Rate (for the Class Level)

Note: All school fees collected must be shown on the Fees Certificate issued by EDB.

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Examples for setting the school fee for non-local students NOT eligible for DSS subsidy

Appendix 8 (p.1 of 1)

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28 Extract of Appendix 5 (p.2 of 2) Examples of Calculation of Fee Revision Percentage of Non-local Students

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For schools charging non-local students school fees equal to

"school fee of the corresponding local students + applicable provisional projected DSS unit subsidy of the corresponding level", if fee change is solely due to the change in the DSS unit subsidy rates, it is not counted as fee revision.

If fee change is due to the change of school fee component of the corresponding local students, it is counted as fee revision and the fee increase % is calculated based on this component.

For School Fees of Non-local Students

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Only approved expenditure items (expenditure of educational nature) can be charged to Government funds.

For the approved list, please refer to

Annex 2 of EDB Circular No. 17/2012

dated 29 August 2012.

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In relation to schools’ participation in the FiT

Scheme, DSS schools are not allowed to increase tuition fees for the reason of participating in the FiT Scheme. Relevant expenditure will not be

considered in the assessment of any applications for fee revision.

For details, please refer to the EDBCM

No.168/2019 on Participation of Schools in Feed-in Tariff (FiT) Scheme issued on 2 September 2019.

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(I) Income and Expenditure Statement under Operating Reserve Name of School :

Schedule 2a (p.2 of 4)

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Breakdown of Other Operating Expenses (2019/20 - 2021/22)

Name of School :

Schedule 2b (p.2 of 2)

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A DSS school will receive full DSS subsidy from EDB unless its school fee level exceeds 2 & 1/3 of the DSS unit subsidy rates (X). Beyond this school fee level, EDB will not provide any DSS subsidy to the school.

If a DSS school charges a school fee exceeding 2/3 and up to 2 & 1/3 of the DSS unit subsidy rate, then for every additional dollar charged over and above 2/3 of the DSS unit subsidy rate, the school should set aside 50 cents or 10% of total school fees for the year, whichever is the greater, for the Fee Remission and Scholarship Scheme.

[Please refer to “Extract of Appendix 6” on Slides 35 - 36]

[Please refer to “Extract of Appendix 6” on Slides 35 - 36]

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Information for Preparing Budget for Provision for Fee Remission and Scholarship Scheme for 2021/22 school year

(a)(i) 2020/21 Projected DSS Unit Subsidy Rates [for calculation under 2020/21 Revised Estimates]

Extract of Appendix 6 (p.1 of 2)

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(a)(ii) 2021/22 Provisional Projected DSS Unit Subsidy Rates [for calculation under 2021/22 Budget]

Extract of Appendix 6 (p.1 of 2) Cont’d Information for Preparing Budget for Provision for Fee Remission and Scholarship Scheme

for 2021/22 school year

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Schools with fee increase applications are required to show the calculation of the amount set aside for fee remission and scholarship scheme for both the 2021/22 budget and the 2020/21 revised estimates.

Deployment of Fee Remission and Scholarship funds is by the school as a whole.

School fee incomes of both local and non-local students should be set aside under one pool.

[Please refer to “Extract of Schedule 2d” on Slide 38, “Schedule 2a”

on Slide 39, & “Extract of Appendix 6” on Slide 40]

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(For school applying fee revision for the 2021/22 school year) Provision for Fee Remission and Scholarship Scheme Name of School : _____________________________

1. Provision for Fee Remission and Scholarship Scheme for the 2020/21 and 2021/22 School Years 2020/21 Revised Estimates

$

2021/22 Budget

$ Required Provisionfor Fee Remission and Scholarship

Scheme as computed in Schedule 2d p.2 and p.3 (A)

Provision made by schoolin the income and expenditure statement(per Schedule 2a p.1) (B)

Surplus / (Shortfall) [ (B) - (A) ]

Extract of Schedule 2d (p.1 of 3)

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(I) Income and Expenditure Statement under Operating Reserve Name of School :

Schedule 2a (p.1 of 4)

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An example for the required provision for fee remission and scholarship scheme for the 2021/22 budget of a secondary school aged below 16 years:

Extract of Appendix 6 (p.2 of 2)

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Schools offering Non-local Curriculum should:

indicate actual and projected number of classes and enrolment of non-local curriculum in Appendix 1 [for schools not proposing fee revision] or Schedule 2 (c) [for schools proposing fee revision] of Template;

provide separate income and expenditure

statement (in Schedules 2 (a) & 2 (b) of the

Template) if different school fees will be

charged for non-local curriculum classes.

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Schedule 2c (p.1 of 5)

Number of Classes, Enrolment, Fee Income and DSS Subsidy Name of School :

1. 2020/21 - Revised Estimates(Note 1)

Figure

Updating...

References

Related subjects :