financial management : from compliance to supporting school development (aided schools)

Financial Management :from compliance to supporting

school development (aided schools)

HKMA K S Lo College Tang Chun Keung Teddy

PPT Source: Principal Chau Chor Shing, PLK No.1 W H Cheung College

6 August 2012

Financial Management• For the best interest of student (enhancing

learning & teaching)

• PTA: Participation, Transparency, Accountability (Compliance)

• 3Es: Efficiency, Effectiveness, Economy (eg No delay in purchasing, Buying the right kind, Value for money…..)

Budgeting (1)• School Mission / Policies • Revenue / Income• Programme Plan Budgeting ( KLA/Subject

Depts/Functional Teams/Units have their own programme plans with budgets) Participation: bottom up vs top down

• Financial estimate (expenditure compared with income): capital investment / operating expenses

Budgeting (2)• Principal/School authority/ Finance

Committee decides on the priority for the budget

• Approval from School Management Committee (SMC) / Incorporate Management Committee (IMC)

Budgeting (3)• Monitoring / reporting/ evaluation

(Monthly financial report; mid-year report; year-end report)

• Make known in the Annual School Profile/Report (transparency and accountability)

Budgeting (4)• Historical budgeting

• Zero-based budgeting

(bare minimum of essential expenditure is identified under each budget heading, remaining funds allocated in accordance with school’s priorities in the school development plan)

Finance and resources• Money

• Manpower

• Space

School Revenue

Government Funds

Rates & Government rent• Not included in OEBG

• Subsidy is paid to school’s account, schools settle payment with Treasury / Housing Authority

• Non-estate schools pay on a quarterly basis. Estate schools pay on a monthly basis.

Salaries Grant • Lab Tech salaries grant =$1.1m• Teacher staff salaries grant

58 x $36205 (MPS pt 24)x12 = $25m

If in full swing = $38m• IMC schools can freeze up to 10% of their

teaching establishment to get Teacher Relief Grant (Cash Grant) to employ more additional contract teachers: 1SGM=0.67mhttp://www.edb.gov.hk/index.aspx?nodeID=112&langno=1

OEBG / EOEBG (IMC Schs)

• Adjustment according to CCPI• OEBG:

General Domain (EDBCM100/2009) Specific Domain: Sch-based remedial support programme, programme funds for whole-school approach to guidance & discipline, capacity enhancement grant…

• Retain up to 12 months’ provision (about 5.5m)

OEBG

• Transfer of funds amongst grants

(General Domain) allowed

(Special Domain) not allowed

• Surplus in General Domain can be transferred to the Special Domain but not vice versa

EOEBG Quiz Do Principals entitle entertainment allowance?• As a guiding principle, entertainment expenses such as

lunch/dinner for staff should not be charged to the EOEBG or any school funds account.

• However, the IMC may approve expenses on entertainment according to the needs and policy priorities of the school .

• The limits of such expenses per occasion (eg School Anniversary Dinner, Parent Teacher Association Annual Dinner) and per head are $150 for breakfast, $350 for lunch and $450 for dinner with service charge and tips included.

• The IMC is required to provide full justifications if the expenses exceed these limits.

Ref: EOEBG User Guide: http://www.edb.gov.hk/FileManager/EN/Content_4802/user%20guide_eoebg.pdf

Grants outside OEBG-CFEG (1)

• Composite Furniture & Equipment Grant (CFEG) (EDBC002/2001A)

• Furniture & Equipment List for new secondary school with 30 classrooms

http://www.edb.gov.hk/index.aspx?nodeID=5535&langno=1

• In a single payment before Sept • On a per class per annum basis• Not a constituent grant of OEBG

Grants outside OEBG-CFEG (2)

• Retain up to five time of CFEG

• Fund from General Domain to CFEG but not vice versa

• Adjustment according to CCPI

• Not for installation of air-conditioners or cost of electricity for air-conditioners (For OEBG/CFEG)

Grants outside OEBG (3)

• Substitute Teacher Grant (EDBC060/1999) / Teacher Relief Grant for IMC schools

• School-based after-school learning & support programme: $200 per target student per annum (EDBCM049/2010) (included in Annual Plan and Annual School Report)

• Time-limited NSS-related Grants:Teacher Professional Preparation Grant; New Senior Secondary Curriculum Migration Grant (Surplus will be clawed back on 31 Aug 2012)

Grants outside OEBG (4) New One-off Grants:• One-off grant for procurement of

e-learning resources (EDBCM121/2010) (spent on or before 31 August 2013)

• Liberal Studies Curriculum Support Grant of $320,000 (EDBCM146/2010) (spent on or before 31 August 2013, Additional LSCSG of $160,000?)

• MNESSG of $530,000 (spent on or before 31 August 2016)

Income vs Expenses

• Average income: about $6m for a 28-class secondary school

• Expenditure

• Any ideas on saving money?

• How much is your accumulated surplus?

• How to handle the accumulated surplus?

School Revenue

School Funds / Subscriptions / General Funds Accounts

Income (1)• Trading operation (must have EDB

approval for non-IMC school): sales of exercise books/school uniforms…………

(profit limit: 15%)

Tuckshop rental (fair market value?)

• Tong Fai ($300 per pupil per annum for senior sec students)

(EDB Fees Certificate)

Income (2)

• Hire of school premises (40% to Government Fund, 60% to School Fund)

• Donations (to be reported to EDB quarterly) –IMC/SMC should determine whether to accept donations, not the Principal)

Income – Approved Collection

• Collections for specific purposes: Blanket approval ($300 per pupil per annum for secondary schools, consult parents and notify SSDO)

• Collection of other charges eg registration fee, entrance exam fee, replacement of student card, transcript, fine for overdue library book etc

Other Sources (1)

• QEF• Cash Grant for School-based After-school

Learning and Support Programmes (EDBCM049/2010)

• School-based Support Services (EDBCM052/2010)

• Home-school Co-operation Grants (PTA)• HK Jockey Club Life-wide Learning Fund

http://www.edb.gov.hk/ed/lwl

Other Sources (2)• Hong Kong Jockey Club Music and Dance Fund• 公民教育活動資助計劃

http://www.cpce.gov.hk/cpscheme.htm• 可持續發展學校獎勵計劃 / 可持續發展基金

http://www.susdev.gov.hk/html/b5/sdf/sdf08.htm• 禁毒基金

http://www.nd.gov.hk/text/tc/beat/index.htm• 環境及自然保育基金

http://www.ecf.gov.hk/tc/application/index.html

• 關愛基金

http://www.communitycarefund.hk/b5/index.asp

Emergency Repairs EDBC001/2010)

• ASD (non-estate schools) / HD (estate schools)

• Standard request form for emergency repairs costing less than $200,000

• Charged to school & class grant for works costing less than $3000 (for primary school schools and special schools) or $8000 (sec schools)

Major Repairs

• Must plan ahead

• Approval depends on funds availability and urgency

MPF (1)

• Are there any tutors in your school?

• What are the sources of funds for their salaries?

• Are they self-employed or employed by the school?

• Do they need to pay MPF

MPF (2)

• Full-time / part-time employees

• Aged between 18 and 65

• Period of employment not less than 60 days

• 5% from employer and employee if $6500 to $25000 (max contribution= $1250)

• 5% from employer only if less than $5000

MPF (3) Quiz • Q1: 兼職校工，每星期工作少於 18 小時，長假

期不用開工。學校是否要供強積金？• 如根據僱傭合約受僱不少於 60 個公曆日， 不論

工作時數， 僱主必須安排參加強積金計劃。• Q2: 十星期產假的代課教師是否要供強積金？• 代課教師要供 5% 。• Q3: 課外活動舞蹈導師，每星期到校二天，每次

3 小時。導師費由學校支付予其個人戶口，學校是否要供強積金？

• Labour Department Tel: 27171771

MPF (4) Quiz• Q4: 如學校需要向僱員發放遣散費或長期

服 務金，應怎樣做？• 根據《 僱 傭 條 例 》，僱主必須在適用情

況下 向僱員支付遣散費 / 長期服務金。在 支付遣散費 / 長期服務金後 ，僱主可向 MPF 計劃受託人申請從累算權益中的僱主 強制性供款部分 （ 及自願性供款部分， 如 有的話 ) 提取有關款項，以抵銷 遣散費 / 長期服務金 。

Procurement of Goods & Services

Quotation / Tendering (1)• Above $5000 but below $30000: at least 2 oral

quotations, approved by Principal• $30000 to $50000: at least 2 written quotations,

approved by Principal• $50000 or above: tendering (at least 5

suppliers), opened by Tender Opening and Vetting Committee (TOVC), and approved by Tender Approving Committee (TAC)

• TAC: P + 2 staff; >$120000: School supervisor, P, a teacher, a PTA representative/parent manager

Quotation / Tendering (2)• Avoid using credit card• Declaration of interest• Security of information• Avoiding splitting purchase orders• Schools should seek separate tenders for single

purchase exceeding $50000 from at least 5 suppliers normally selected from the Standard List of Suppliers provided by the EDB

• At least 4 weeks between the issue and closing of a tender

Quotation / Tendering (3)• Should include ‘Anti-Bribery Clauses’ in

tender documents or order form

• Record keeping

• Don’t accept late tenders

• Tender box

• Different members for TOVC and TAC

• Reject lowest quotation with full justifications and fully documented

Quotation / Tendering (4) - Quiz• Q1: 校監在招標後，指出最低標的價格都較

市價高，他指示校長與中標公司再談判價錢，務求為學校節省支出。你會如何處理？

• Q2: 學校預留 $200000 加建課室，招標後發覺價格飛升，最低標要 $280000 。負責主任建議改用次級物料和縮小規模，直接與最低標的公司協商進行工程。你會如何處理？

Keep Records

• Permanent records: fixed asset register, annual accounts, inventories, capital expenditure and Government non-recurrent subsidies

• Keep for 7 years: books of accounts, vouchers, bank statements, tendering & quotation documents

• Keep for 2 years: quarterly returns, fees receipts, register of hire of school accommodation

Finance and resources

• Money

• Manpower

• Space

Manpower-related Grants (1)

• Capacity Enhancement Grant (CEG)• Composite Information Technology Grant

(CITG)• Enhanced SSCSG

For 4 years from 2008/09 to 2011/12 – 0.15GM per NSS class

• SSCSGFrom 2012/13 onwards – 0.1GM per NSS class

Manpower-related Grants (1)• Teacher Relief Grant / Substitute Teacher

Grant

• STG/TRG Cash Grant ： Freezing not more than 10% of the teaching establishment for STG/TRG Cash Grant

Staff Capacity Enhancement

• Laboratory Technician I / II: frozen until 31 Aug 2016.

• Clerks & TAs: How many?

• Janitors: How many? Full-time or Part-time? Outsourcing / Contract out?

• Pay scale: MPS or market rates?

• Parent volunteers and alumni: Travel Allowances?

Finance and resources

• Money

• Manpower

• Space

Space

• Without structural alterations: no needs to seek approval on change of room use

• With structural alterations: must appoint an AP (Authorized Person: Architect /Surveyor /Structural Engineer)

• Approval from ASD/HD, FSD, DOH

Space as Income• Hire of Accommodation in Aided Schools • Hall: standard rate $1260 per 4-hour, AC$200

per hour (min 2 hrs)• Classroom: standard rate $115 per hour, AC$18

per hour (min 2 hrs)• The hire charges should be credited to the

Subscriptions Account in the first instance. Any related expenses such as payment to janitor staff (at an appropriate rate to be decided by the school) should be charged to these accounts, and 40% of the net balance transferred to the School and Class Grant Account.

DO’s: Key Aspects of Sound Financial Management (1)

1. Proper authorisations and approvals e.g. all expenses must be properly authorised before payments are made.

2. Proper documentations and reporting including the minutes of SMC/IMC meetings e.g. all payments should be supported by payment vouchers. Original invoices should be attached to the payment vouchers. All paid vouchers and invoices should be stamped with the word “PAID” and dated by the paying staff to prevent duplicate payment.

DO’s: Key Aspects of Sound Financial Management (2)

3. All transactions should be properly recorded and proper books of accounts and relevant documents should be kept e.g. maintain separate bank accounts for government funds and school funds and keep up-to-date cash books for bank accounts and petty cash.

4. Safe keeping of school assets and other valuables e.g. physical checking of assets should be conducted at least once a year; surprise cash counts should be conducted at irregular intervals in a year.

5. Clear segregation of duties among the functions of authorisation, recording and custody e.g. the preparation and authorisation of payment vouchers should not be conducted by the same person.

6. Clear and detailed rules and responsibilities of school staff.

7. Authority limits (e.g. financial limits for the tenders or quotation exercise) should be adhered to.

8. Internal checks should be carried out e.g. the school head should review the cash books and bank reconciliation statement prepared monthly by the school clerk. The school head should initial and date these documents after checking.

DO’s: Key Aspects of Sound Financial Management (3)

DO’s: Key Aspects of Sound Financial Management (4)

9. Prudent in use of financial resources e.g. budgetary control.

10. Comply with the requirements of Codes of Aid, School Administration Guide (SAG) and relevant EDB circulars/guidelines.

11. Management supervision and review e.g. any write-off of capital assets should be done with the approval of the school head. A report on the write-off should be passed to the SMC/IMC for information.

Don’ts (1)1. Don’t split orders to evade financial limits

2. Don’t forget to call tender/quotation for renewals of contracts

3. Don’t mix up the Government Funds and School Funds eg incomes from school activities were credited to school’s own funds but the relevant expenses were charged to government funds

Don’ts (2)4. Don’t accept donations without SMC/

IMC’s approval

5. Don’t charge unsubventable items into government subventions accounts eg staff meal expenses, reception party for visiting guests, donations to other organization

6. Don’t deposit government funds/school funds into any bank account(s) not under school’s name

Useful Website• http://www.edb.gov.hk

(School Administration Financial Management )

(School Administration Regulations School Administration Guide 6. School Finance Matters

• ICAC 學校誠信管理http://www.icac.org.hk/me/material/urm03000.htm

Q&A

Thank You!