catering operation

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Introduction

Best Practice Module

Management of Catering OperationsManagement of Catering Operations


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Page

CHAPTER 1 PROBITY REQUIREMENTSIntroduction 1

Code of Conduct 1

Conflict of Interest 1

Acceptance of Advantages and Entertainment 2

Handling of Confidential Information 2

CHAPTER 2 PROCUREMENT PRACTICES

Introduction 3

List of Suppliers / Service Providers 3

Purchase Requisitions 4

Quotations 4

Tenders 4

Term Contracts 5

Petty Cash Purchases 5

Receipt of Goods and Making Payments 5

CHAPTER 3 FOOD PURCHASE

Introduction 7

General Control Measures 7

Daily Purchases of Fresh Food from Markets 7

Purchases and Handling of High-value Food Items 8

CONTENTS


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Page

CHAPTER 4 ADMINISTRATION OF SALES TRANSACTIONS

Introduction 11

Operational Guidelines 11

Recording of Customers' Bills 11

Cash Register 11

Day-end Checking 12

Control Over Buffet Bills 12

Waiver of Charges 12

Closing of Daily Sales 12

Management Monitoring 13

Handling of Credit Card Information 14

Internal Audit 14

CHAPTER 5 STORES MANAGEMENT

Introduction 15

Company Policy and Guidelines 15Segregation of Duties 15

Receipt and Issue of Stores 15

Physical Security 16

Independent Stock Checks 16

Disposal of Stocks 17

ADVISORY SERVICES GROUP 19

APPENDIX (Sample Code of Conduct) 21

Form A (Report on Gifts Received) 25

Form B (Declaration of Conflict of Interest) 26

Annex (Extracts of the Prevention of Bribery Ordinance) 27


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1

PROBITY REQUIREMENTS

Introduction

Code of conduct

Hong Kong is an internationally renowned tourist centre and part of its attraction is the

quality cuisine which provides a wide range of gourmet dishes to the tourists. Dining out isalso an activity well liked by the local people. Hence, the catering industry plays an

important role in serving both the local community and visitors to Hong Kong. To sustain the

industry's development and international reputation, it is imperative for catering operators

to maintain a high standard of professionalism and adopt good practices in their operations.

This document aims to provide a checklist of good practices in the management of acatering business. As there are a variety of catering operations ranging from hotelrestaurants, café, fast food restaurants, and other restaurants and eateries of different sizes,it is expected that individual operators would make adaptations to the recommendedpractices and procedures in this booklet to suit their own operational needs.

Commitment to ethical practice is crucial to good governance in the running of a

business. It is advisable for catering operators to issue a Code of Conduct to staff,

stating the company’s commitment to ethical practice and setting out the ethical

standards required of them.

In appointing term service providers or suppliers, catering operators could require themto issue a similar Code of Conduct to their employees.

The Code (a sample code is at the Appendix) should include the following key elements:

• rules on acceptance of advantages ;

• rules on acceptance of entertainment ;

• requirements to declare any conflict of interest when performing their duties (e.g. in

making procurement ) and the procedures for handling such declarations; and

• requirements to protect confidential or commercially sensitive information obtained

through work.

What is conflict of interest and how should a conflict be handled?

A conflict of interest situation arises when the private interest of a staff membercompetes or conflicts with the interest of the company. The staff should be advised to

avoid any actual or perceived conflict of interest and to report to their supervisors when

such a situation arises.

Conflict of Interest

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Management of Catering Operations Chapter 1

It would be helpful to the staff if examples of conflict of interest could be provided in

the Code of Conduct. The following are some examples of conflict of interest situations

that may arise from procurement activities, staff administration and works supervision:

• A staff member involved in the procurement process has financial interest in a company

which is being considered by the catering operator in the selection of a supplier.

• A candidate under consideration in a recruitment exercise is a relative of the staff

member responsible for the recruitment.

• A staff member invests in the business of a food supplier who supplies food to his

own restaurant.

• A staff member responsible for the maintenance of restaurant equipment engages the

selected contractor to carry out maintenance work in his home at a discounted price.

Employees, in particular those responsible for procurement of food items, may be

offered specimens of food which may be expensive items like abalone, sharks’ fins etc.

or even commission by suppliers. As such offers may be bribes in disguise, catering

operators should have a policy prohibiting employees from accepting advantages which include any gift, loan, commission, employment, contract, services etc., from

persons with whom they have official dealings. If the employees are allowed to accept

token gifts, the permissible value should be specified.

While entertainment is an acceptable social activity, extravagant or frequent

entertainment offered to the staff may be a calculated act to “sweeten” them in order to

build up a store of goodwill for future demand of favouritism (e.g. in the selection of

suppliers ). Catering operators should issue guidelines, advising the staff to avoid

accepting meals or entertainment that are excessively lavish or frequent .

Some staff may have access to confidential information such as the customers’ data and

other commercially sensitive information relating to the catering operator’s business.

To protect the interest of the operator and to prevent abuse, the classification of

information should be made known to the staff concerned. The restriction on access to

confidential information should be clearly defined. While individual staff are heldresponsible for the protection of the confidential information in their possession, the

management should ensure that there are adequate safeguards to protect data integrity

in the computer and sufficient physical security in the office.

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Acceptance of Advantages and Entertainment

Handling of Confidential Information


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3

PROCUREMENT PRACTICES

Introduction

Procurement of goods and food items (e.g. fresh and dried food, consumables andkitchen equipment) is a core activity in the running of a catering business. An effective

and competitive procurement system helps to protect the operator’s interest and ensure

the purchases made are value for money.

A sound procurement system should have the following checks and balances :

• segregation of duties (e.g. different staff should be assigned to source suppliers,

evaluate quotations/tenders, issue orders, accept the goods upon delivery and certify

payments as far as possible );

• approval authorities at the right level for purchases of specified financial limits;

• procurement methods for different types and values of purchases (e.g. by verbal or

written quotations, tenders, or petty cash );

• special approval for exceptional purchases with justifications (e.g. urgent purchases

or single source procurement ); and

• proper documentation and supervisory checks in the procurement process.

Where practicable, a catering operator should compile separate lists of suppliers for

commonly used items/services . This would help minimize the time required for

sourcing bidders for every purchase and ensure that only eligible suppliers are invited to

bid.

The following points should be taken into consideration in keeping the suppliers lists:

• The considerations for inclusion or deletion of suppliers should be consistent and

made known to the suppliers as appropriate (e.g. size of companies and years of

experience for inclusion, and poor performance for deletion ).

• The listed suppliers should always be invited to bid on a fair share principle (e.g. by

rotation ), even though other suppliers may be nominated by individual staff or the users

based on their personal knowledge. Any deviations from this practice should be

justified and approved by a designated authority.

• The list should be periodically updated with a view to admitting new suppliers and

removing the inactive ones or those who have under-performed.

Lists of Suppliers/Service Providers

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There should be a procedure for raising purchase requisitions. A standard requisition form could be used to provide an audit trail, showing details such as the description,

quantity and place of origin of the goods or food items required, the expected date of

delivery, the name of the requesting person, and the approval authority as appropriate.

Goods or food items are usually purchased through the invitation of bids from a number

of selected suppliers.

The following arrangements help enhance control and minimize the risk of

manipulation:

• The minimum number of bidders to be invited for quotation for different values of

purchases and the authority to approve the selection of bidders should be specified.

• All quotations , whether obtained verbally or by fax, should be protected from

tampering or leakage before the deadline . Verbal quotations should be recorded or

confirmed in writing. A designated fax machine installed in a secure area or by a

computer terminal with password control should be used for receiving faxed

quotations . All written quotations should be sealed and kept securely, preferably by

a staff member not involved in the procurement process.

• To prevent false quotations, a supervisor may randomly call the bidders to confirm

the genuineness of the quotations received or contact the invited suppliers who have

failed to return any quotation to see whether they have actually been invited to bid.

To enhance competitiveness, open or restricted tendering may be conducted to procure high value goods or food items (e.g. term supplier contracts ) beyond a specified cash

threshold. The process should be competitive and transparent to the bidders.

The following arrangements are recommended for procurement by tender:

• Detailed specifications such as the description of goods or food items, the selection

criteria (e.g. whether price is the only consideration or the criteria in broad terms ),

and other relevant conditions (e.g. delivery schedules and payment terms ) should be

provided in the tender invitation to facilitate the bidders in preparing their tenders.

• The tender invitation should include a warning against offer of advantages to the

catering operator’s staff.

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Purchase Requisitions

Quotations

Tenders


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• All bidders should be given the same information and any tender briefing may be

conducted for them on the same occasion as far as possible.

• The bidders should be required to submit tenders in duplicate, with the copies kept

by a person not involved in the procurement to prevent tampering of tenders.

Tenders should be deposited into a double-locked tender box with the keys held by

separate staff members.

• A deadline should be set for tender submission. Late tenders should normally not be

accepted unless there are justification and endorsement from the managerial staff.

• Tenders should be opened after the deadline by an opening team comprising at leasttwo persons.

• If price is not the only consideration, tenders should be evaluated in accordance with

the pre-determined criteria by a tender assessment team .

If frequent and repeated purchases of certain goods or food items are necessary, the catering

operator may appoint term suppliers to save the time and resources spent on obtaining

quotations for each purchase. This could also help minimize the risk of favouritism to a

single supplier if purchases are made directly by the users.

Petty cash purchases should only be permitted for small and miscellaneous purchases.

The maximum expenditure on an item to be procured by petty cash should be

specified, beyond which approval from the supervising staff should be required. Cash

payment should only be made against invoices.

Acceptance of goods upon delivery is an area prone to abuse. Compromised staff could

cover up short delivery, or accept sub-standard goods/food items, or unduly certify

payments. To deter malpractice, the following control measures are recommended:

• Goods delivered should be inspected and counted against the quantity specified in

the delivery note, cross-referencing the purchase order if any.

• The acceptance should be certified by a staff member not involved in the purchase if

practicable.

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Term Contracts

Petty Cash Purchases

Receipt of Goods and Making Payments


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• Defective or short delivered goods or food items should be properly recorded andfollowed up promptly (e.g. ask the supplier to make good the shortfall or notify the

accounts unit to deduct payment).

• Random supervisory checks should be conducted on the quality and quantity of the

accepted goods, especially those of high value.

• Payment for goods should be made against duly certified invoices , purchase orders

and/or delivery notes.

• Internal time limits should be set for effecting payment to the suppliers to avoid

undue delay because those who have a cash flow problem may resort to improper

means to expedite payment.

• Records of payment comprising full particulars of the items and supporting

documents should be kept to provide audit trail.

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7

FOOD PURCHASE

Introduction

Food cost is a major item of expenditure in a catering business. To maximize businessprofit and to maintain the quality of food, it is important for the catering operators to

ensure that the food purchased is value for money and the quality is of the required

standard. This chapter focuses on food purchases and should be read jointly with the

last chapter on general procurement.

To prevent unscrupulous staff from engaging in malpractice in procurement and

handling of food items, the following general control measures are recommended:

• A central procurement unit should be set up for sourcing food suppliers and

maintaining the suppliers list. A shortlist of suppliers should be kept for each food

item to facilitate selection of suppliers for invitation to bid.

• For foodstuff regularly required in bulk (e.g. rice, cooking oil, frozen meat ), term

suppliers could be sourced centrally.

• The food suppliers should be advised to approach the management if they have any

promotional activities instead of the kitchen staff.

• The kitchen staff should, as far as practicable, take up an advisory role (e.g.

suggesting the types of food items and periodic changes of menus ) instead of an

executive function in the selection of suppliers and negotiation of prices .

• The types of food to be purchased directly by the kitchen staff should be restricted

(i.e. fresh food ), supplementing the major food supplies arranged by the central

procurement unit.

For small catering business, the procurement of fresh food items including fresh meat, fish,

vegetable and fruit is usually handled by the chef on a daily basis. Very often, the chef

would go to a nearby market stall of his choice to make purchases. As the prices of fresh

food could vary from stall to stall, depending much on the type and quality, it is difficult for

the operator to monitor such purchases.

General Control Measures

Daily Purchases of Fresh Food from Markets

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To reduce the risk of dishonest chefs accepting kick-backs from the patronized stalls and

conniving at short delivery or substandard food, the following control measures are

recommended:

• The central procurement unit could source a few market stalls , for the supply of

different types of fresh food, in the vicinity of the restaurant and require the chef to

purchase food items from them. The central unit should also conduct price

comparisons on a regular basic to ensure the prices quoted are reasonable.

• The selected market stalls should be advised of the operator’s policy that acceptance

of advantage by any staff is prohibited.

• A supervisor should randomly check the qualities, quantities and market prices of

the foodstuff accepted by the chef before certifying the receipts for payment.

• Payment to the market stalls should be made through bank account as far as

practicable.

• The catering operator should periodically conduct food-tasting exercises on a surprise

basis and collect feedback from customers on the quality of the food provided.

• When considering whether or not to continue patronizing the selected market stalls ,the central procurement unit should conduct price reviews and take into account any

adverse feedback from the kitchen staff and the customers.

Procurement of high-value food items such as sharks’ fins, birds’ nests, dried scallops

and abalone must be carefully handled and monitored. The prices of such food items

may vary a great deal depending on their quality and place of origin, and detection of

poor quality often requires the expertise of experienced staff or chefs. Hence, there isroom for manipulation by unscrupulous staff/chefs who may collude with the suppliers

to defraud the operator. There are also concerns about theft or swapping of such

expensive food items, resulting in losses to the operator.

The catering operators may adopt the following safeguards to prevent malpractice:

• To centrally purchase high-value food items and distribute to individual restaurants in

the chain for use.

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Purchases and Handling of High-value Food Items


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• To appoint a few fresh seafood suppliers with whom individual restaurants could

place orders, and designate a team comprising a restaurant manager, and the store

and kitchen staff to closely monitor the quality and quantity (including weight) of deliveries .

• To assign a supervisor not involved in the procurement to witness and monitor the

acceptance of food items, recording any substandard or short-delivered items for

remedial actions.

• To closely monitor the consumption of these items by the kitchen staff and conduct

periodic comparisons of the gross profit margins among the restaurants in the group

to detect anomalies.

• To conduct surprise food-tasting exercises and obtain customer feedback on the

quality of such food items.

• To establish a mechanism for conducting stock checks on these items shortly after

delivery to detect and deter malpractice such as bogus orders and short delivery, etc.

Sometimes, the suppliers may offer samples of food items to the purchasing staff for

tasting as a sales tactic. The offer of expensive samples like abalone or wine may alsobe a bribe in disguise to the staff in return for business. Moreover, such samples have a

resale value. The operator should establish a system for handling of food samples ,

incorporating the following safeguards:

• The catering operator should have a policy prohibiting the acceptance of food

samples by individual staff , unless otherwise authorized.

• The receipt and disposal of food samples with a commercial value should be properly

recorded in a register and subject to the supervisor’s random checks.

• The evaluation of the quality of food/wine samples should be conducted by a team

of managerial staff together with the chef or bartender. Preferably the food tests

should be conducted without revealing the supplier’s identity to the evaluators.

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11

ADMINISTRATION OF

SALES TRANSACTIONS

Introduction

In the setting of catering business, customers’ bills are usually settled in cash or bycredit card. The common malpractice found in this area includes non-recording or

cancellation of bill items to pocket the sales income, under-billing to favour friends,

credit card fraud, pilfering of cash collection, and waiver of charges etc. Some of these

abuses are tantamount to criminal offences warranting reports to the Police but an

effective control system could help prevent their occurrences.

To ensure consistency in practice, the staff should be issued with procedural guidelines

covering the receipt of customers’ payments, recording of transactions, handling of cash

registers, placing and registering of food orders, etc. The levels of staff and their

responsibilities in handling such matters should be set out in the guidelines and the authority

for approving certain sales transactions (e.g. waiver of charges ) should also be specified.

Apart from the guidelines, it is advisable to design standard forms to be prepared and

signed by the staff responsible (e.g. daily sales receipt reports ) for the handling of the

above activities as this could provide an audit trail and enhance the accountability of staff.

All transactions should be recorded promptly and supported by receipts or vouchers .

An automated food ordering system should preferably be used whereby food orders

placed by waiters in the system are electronically captured in the kitchen records for

food production and in the cashier records for billing.

If it is a manual system, it is advisable to use pre-printed food order forms with serial

numbers for the placing of orders from customers. The head portion of the order form

should be retained for day-end reconciliation to prevent evasion of payment.

To ensure accountability and safe custody of cash/credit card vouchers, only designated

staff members should be allowed to operate the cash register .

It is advisable to require the designated staff to pay in the bank during the day any cash

collection which has accumulated to a specified amount.

If necessary, CCTV with tape recording facilities could be installed to monitor cash

handling at the cashier counters.

Operational Guidelines

Recording of Customers’ Bills

Cash Register

CHAPTERCHAPTER

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A way to deter and detect abuses in the handling of food orders and bills is to designate

a responsible staff member, e.g. the restaurant manager, to conduct day-end

reconciliation of copies of customers’ bills and food order forms . Any cases of missing

food order forms should be looked into and brought to the attention of more senior

managerial staff. Random checks could also be made on selected transactions against

the till roll records of the cash register. Any cancelled food order forms should be filed

for record.

If a cash register is used, a copy of the till receipt should be attached to the copies of

customers’ bills copy to certify the amount received. A copy of the till roll records

should be kept for random checking against the customer bills at the end of the day.

During buffet meals, customers tend to move around and it may be difficult to count

them for the purpose of billing. A common malpractice is that waiters may use

repeatedly the same bill of buffet charges to pocket the cash paid by customers. The

following safeguards are recommended to prevent manipulation:

• Make it a rule that once the customers are seated, a bill should be prepared and

initiated by the waiter/waitress serving them, recording also the time.

• The supervisor should randomly check the bills held at the payment counter against the

tables of guests with a view to detecting irregularities (e.g. no bill has been prepared for a

table or a bill prepared has been outstanding for a long time ).

The catering operator should have a procedure for waiving charges (e.g. parking fee,

promotional food offers by credit card companies ) which should be authorized by designated staff . A waiver of charges on each occasion should be recorded for audit

review.

Closing of daily sales accounts helps managers to detect fraud or malpractice, such as

misappropriation of sales income, abuse of discount policy, and delay in recording

customers’ bills. The following are some control measures recommended for closing of

daily accounts.

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Day-end Checking

Control Over Buffet Bills

Waiver of Charges

Closing of Daily Sales


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At the end of the day, the cashier should print a till roll report from the cash register

and perform the following duties:

• tallying of the sales income with the till roll report;

• reconciliation of the opening and closing cash flow;

• batching of sales documents (i.e. customer bills, credit card vouchers, cancelled bills

etc.) in sequential order; and

• dispatching of the daily income report, any banking receipts, and sales documents to

the accounts department with a copy retained at the restaurant.

Before endorsing the daily income report and passing it to the accounts department, the

restaurant manager should randomly check the following:

• the sales income and the till toll report;

• the sequential order of the sales documents as shown on the daily income report;

• proper approval for food order cancellation in the order forms and waiver of charges;

and

• the cash flow balance.

An effective management monitoring system could help to deter and detect malpractice.

The catering operator may consider requiring the staff concerned to submit management

reports , such as reports showing the food cost, sales income, and gross profit by activities

(e.g. lunch, beverage, banquet functions ), or analyses on promotional activities (e.g. use of

cash coupons and complimentary food vouchers ).

The catering operator or his representative should also conduct surprise checks on the

cash registers, bills etc.

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Management Monitoring


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The handling of customers’ credit cards is an area vulnerable to malpractice. Someunscrupulous restaurant staff may accept bribes from criminal syndicates in return for

capturing customers’ credit card information for producing counterfeit cards. They may

also corruptly condone the use of counterfeit cards. Such illicit activities are not easy to

detect and if there is any suspicion of malpractice, the catering operator should report

the case to the ICAC or Police as appropriate.

Nonetheless, the risk of malpractice could be mitigated if the catering operators adopt

the preventive measures as recommended below:

• Briefing sessions may be arranged for staff to raise their awareness of the criminalityof such activities, the offences and penalties under the law, and the company’s

disciplinary action if such illicit activities are discovered.

• Clear instructions should be given to staff on the handling of credit card transactions,

e.g. requiring the designated staff to sign on the credit card payment slips to hold

them accountable for the transactions.

• Effective security measures should be adopted to minimize the risk of information

leakage, e.g. to keep the credit card payment slips in a secure place with restricted

access.

• The staff should be informed of the channels for reporting approaches by a criminal

syndicate and incidents of corrupt practices.

Sales operations should be subject to internal audit to ensure compliance with

established sales policies and procedures. If necessary, “mystery customers” may be

engaged to observe the floor operations and sales activities, and report the findings tothe catering operator.

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Handling of Credit Card Information

Internal Audit


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15

STORES MANAGEMENT

Introduction

In the catering industry, stock control is important because the food items (e.g. birds’ nests, sharks’ fins and abalone ) and goods (e.g. fine-dining table sets ) in store may be

expensive and have a re-sale value. Besides, control of fresh food items could be

difficult because of their perishable nature.

Malpractice such as pilfering of food items/goods or improper disposal of usable items will

result in financial loss to the catering operators. Corruption also arises if such malpractice

is covered up by compromised or colluding supervisors. This chapter aims to help

catering operators to set up an effective store control system to prevent malpractice.

The catering operator should make known to all staff the company policy that any

misuse or misappropriation of the company’s assets and resources will not be tolerated,

and any such incident will be reported to the ICAC or Police as appropriate and

disciplined by the company.

There should be clear guidelines on the handling of stores for staff compliance,

covering the procedures for acceptance, issue, replenishment and disposal of stock.

The different levels of authority for various store control functions should be specified.

To provide checks and balances , the duties for ordering stocks, receiving and issuing

food items/goods, and stocktaking should be assigned to different staff members as far as

practicable.

The following safeguards are recommended to ensure that only food items/goods of the

quantity and quality specified in the purchase orders are accepted:

• Random counter-checks on the stocks received against the purchase orders should be

conducted by a supervisor or a staff member not involved in the placing of orders

before authorization of payment.

• Procedures should be clearly laid down for reporting and handling poor quality food

items/damaged goods, as well as any short-delivery and over-delivery .

Company Policy and Guidelines

Segregation of Duties

Receipt and Issue of Stores

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• Serially numbered receipts recording the receipt of goods (e.g. description of the food

item/goods and quantity or weight ) should be issued to the supplier and copied to the

accounts section.

• All issues of stores should be supported by properly approved vouchers and

acknowledged by both the storekeeper and the recipient. The storekeeper should be

required to issue items on a “first-in-first-out” basis, in particular those items with a

specified consumption date or shelf life.

To prevent theft or pilfering, store items should be kept in a secure place with restrictedaccess to authorized staff only. Items of high value should be kept under lock and the

key holders should be held accountable for the stock. CCTV may be installed to

monitor access to the stores of expensive food items.

Stock checks could help detect and deter malpractice in stores management. An

independent checker or team could be assigned to conduct periodic stocktaking exercises

whilst the supervisor should make regular surprise stock checks . A effective stocktakingmechanism should include the following safeguards:

• A master inventory record of all stock items should be compiled to facilitate stock

checks.

• The results of stock checks should be reconciled with the inventory records.

• Procedures should be established to handle the discrepancies identified in the stock

checks, including documentation, investigation and reporting to the appropriate

authority.

• Staff at the appropriate level should be designated to approve any amendment of

stores records as a result of the stock checks.

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Physical Security

Independent Stock Checks


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The disposal of stock items should follow established procedures including inspection,certification and disposal . The approving authorities and the methods of disposal (e.g.

for re-sale or disposal as waste ) should be specified.

Disposal of items by dumping should be handled by at least two persons, with a more

senior staff member acting as a witness . Disposal records should be kept and certified

by the staff responsible.

If the stocks are put up for sale , the estimated re-sale value, method of sale (e.g. by

auction or direct sale to staff or external buyers ), and the selection of buyers should be

endorsed by the catering operator or a designated senior staff member. The staff

involved in the process should be asked to declare any conflict of interest.

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Disposal of Stocks


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19

ADVISORY SERVICES GROUP

Apart from this Best Practice booklet, there is a series of Best Practice modules

on systems such as staff administration, administration of maintenance and

repair works etc. They can be obtained from the Advisory Services Group of the Corruption Prevention Department of ICAC which also provides free,

confidential, and tailor-made corruption prevention advice to private organizations on

request. For further information, please contact the Group at telephone no. 2526 6363

or fax no. 2522 0505 or email address: [email protected] .


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Management of Catering Operations

APPENDIX

(Company Name)Sample Code of Conduct

The Company believes that honesty, integrity and fair play are important company

assets in business. All staff have to ensure that the Company’s reputation is not

tarnished by dishonesty or corruption. This Code sets out the basic standard of conduct

expected of all staff and the company policies on acceptance of advantages and

declaration of conflict of interest by staff in connection with their official duties.

2. Under Section 9(1) of the Prevention of Bribery Ordinance, an employee who solicits

or accepts an advantage in connection with his work without the permission of his

employer may commit an offence. The term “advantage” is defined in the Ordinance

and includes money, gift, loan, fee, reward, employment, contract, service and

favour. The person offering the advantage may also commit an offence under Section

9(2) of the Ordinance.

3. An employee who, with intent to deceive his employer, falsifies documents or

furnishes false accounting records may be guilty of an offence under Section 9(3) of

the Ordinance. Section 9 of the Ordinance and the definition of “advantage” are

detailed at the Annex .

4. It is the company policy that staff should not solicit or accept any advantage from

any persons having business dealings with the Company (e.g. clients, suppliers,

contractors). However, staff are allowed to accept (but not solicit) the following

gifts offered voluntarily:

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

(b) gifts given on festive or special occasions subject to a maximum limit of $

in value.

5. Staff should decline an offer of a gift if the acceptance could affect their objectivity in

conducting the company’s business, or induce them to act against the interest of the

company, or lead to allegations of impropriety. If a staff member wishes to accept a gift

not covered in paragraph 4, he should seek permission in writing (via Form A) from

(name and/or post of a senior staff ).

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Introduction

Prevention of Bribery Ordinance

Acceptance of Advantages


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6. As defined in Section 2 of the Prevention of Bribery Ordinance, “entertainment”refers to food or drink provided for immediate consumption on the occasion, and

of any other entertainment provided at the same time. Although entertainment is

an acceptable form of business and social behaviour, staff must not accept lavish or

frequent entertainment from persons with whom the company has business

dealings (e.g. suppliers or contractors) to avoid placing themselves in a position of

obligation to the offerer.

7. A conflict of interest situation arises when the private interest of a staff member

competes or conflicts with the interest of the company. Private interest includes both

the financial and personal interests of the staff member and those of his connections.

Connections include family members, relatives, and close personal friends.

8. Staff should avoid situations which may lead to an actual or perceived conflict of

interest situation, and should make a declaration in writing (via Form B ) to (name

and/or post of a senior staff ) when such a situation arises. Failure in doing so may give

rise to criticism of favouritism, abuse of authority or even allegation of corruption.

9. Some common examples of conflict of interest include:

(a) A staff member involved in the procurement process is closely related to or has

beneficial interest in a company which is being considered by the Company in

the selection of a supplier or service provider;

(b) one of the candidates under consideration in a recruitment or promotion

exercise is a family member, a relative or a close personal friend of the staff

member responsible for the recruitment or promotion;

(c) a staff member involved in the selection of a supplier for the Company engages

in frequent or excessive gambling with one of the suppliers under

consideration;

(d) a term contractor whose contract is about to be renewed grants a personal loan to

the staff member responsible for contract negotiation; or

(e) a staff member responsible for evaluating tenders is a part-time consultant of

one of the tenderers.

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Entertainment

Conflict of Interest

Management of Catering Operations APPENDIX


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10. All staff are prohibited from disclosing any information classified by the companyto anybody without authorization. Those who have access to or in control of such

information should at all times ensure its security and prevent any abuse or misuse

of the information. Examples of misuse include disclosure of information in return

for monetary rewards, or use of information for personal gains.

11. It is the personal responsibility of every staff member to understand and comply

with the Code. Managers should also ensure that their subordinates understand

well and comply with the standards and requirements stated in the Code.

12. Any staff member who is in breach of the Code will be subject to disciplinary

action, including termination of employment. In cases of suspected corruption or

other criminal offences, a report will be made to the ICAC or the appropriate

authorities.

13. Any enquiries about the Code or reports of possible breaches of this Code should

be channeled to (name and/or post of a senior staff ) for advice and action.

___________________________

(Name of Company )

Date :

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Handling of Confidential Information

Compliance with the Code

Management of Catering Operations APPENDIX


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Form A

(Company Name)

REPORT ON GIFTS RECEIVED

Part A To be completed by Receiving Staff

To : (Approving Authority)

Description of Offeror :

Name & Title of Offeror :

Company :

Relationship (Business / Personal) :

Occasion on which the Gift was / is to be Received :

Description & (Assessed) Value of the Gift :

Suggested Method of Disposal : Remark( ) Retained by the Receiving Staff ( ) Retained for Display / as a Souvenir in the Office( ) Share among the Office( ) Reserve as Lucky Draw Prize at Staff Function( ) Donate to a Charitable Organization

( ) Return to Offeror( ) Others (please specify) :

(Name of Receiving Staff)(Date) (Title)

Part B To be completed by Approving Authority

To : (Name of Receiving Staff )

The recommended method of disposal is *approved/not approved. *The gift(s)concerned should be disposed of by way of :

(Name of Approving Authority)

(Date) (Title)

* Please delet as appropriate

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Form B

(Company Name)Declaration of Conflict of Interest

Part A Declaration (To be completed by Declaring Staff )

To : (Approving Authority)

I would like to report the following existing/potential* conflict of interest situationarising during the discharge of my official duties :-

Persons/companies with whom/which I have official dealings and/or personalinterests

Brief description of my duties which involved the persons/companies mentionedabove

(Name of Declaring Staff)(Date) (Title / Department)

Part B Acknowledgement (To be completed by Approving Authority )

To : (Declaring Staff )

Acknowledgement of Declaration

The information contained in your declaration form of (Date) is noted. It has beendecided that :-

❑ You should refrain from performing or getting involved in performing the work, asdescribed in Part A, which may give rise to a conflict.

❑ You may continue to handle the work as described in Part A, provided that there is nochange in the information declared above.

❑ Others (please specify) :

(Name of Approving Authority)(Date) (Title / Department)

* Please delet as appropriate

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Management of Catering Operations

Extracts of the Prevention of Bribery Ordinance

(1) Any agent who, without lawful authority or reasonable excuse, solicits or accepts

any advantage as an inducement to or reward for or otherwise on account of his -

(a) doing or forbearing to do, or having done or forborne to do, any act in relation

to his principal’s affairs or business; or

(b) showing or forbearing to show, or having shown or forborne to show, favour or

disfavour to any person in relation to his principal’s affairs or business,

shall be guilty of an offence.

(2) Any person, who, without lawful authority or reasonable excuse, offers any

advantage to any agent as an inducement to or reward for or otherwise on account

of the agent’s -

(a) doing or forbearing to do, or having done or forborne to do, any act in relation

to his principal’s affairs or business; or

(b) showing or forbearing to show, or having shown or forborne to show, favour ordisfavour to any person in relation to his principal’s affairs or business,


(3) Any agent who, with intent to deceive his principal, uses any receipt, account or

other document -

(a) in respect of which the principal is interested; and

(b) which contains any statement which is false or erroneous or defective in any

material particular; and

(c) which to his knowledge is intended to mislead the principal,


(4) If an agent solicits or accepts an advantage with the permission of his principal,

being permission which complies with subsection (5), neither he nor the person

who offered the advantage shall be guilty of an offence under subsection (1) or (2).

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Section 9

ANNEX


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(5) For the purpose of subsection (4) permission shall -

(a) be given before the advantage is offered, solicited or accepted; or(b) in any case where an advantage has been offered or accepted without prior

permission, be applied for and given as soon as reasonably possible after such

offer or acceptance,

and for such permission to be effective for the purpose of subsection (4), the

principal shall, before giving such permission, have regard to the circumstances

in which it is sought.

“Advantage” means :

(a) any gift, loan, fee, reward or commission consisting of money or of any valuable

security or of other property or interest in property of any description;

(b) any office, employment or contract;

(c) any payment, release, discharge or liquidation of any loan, obligation or other

liability, whether in whole or in part;

(d) any other service, or favour (other than entertainment), including protection from

any penalty or disability incurred or apprehended or from any action or proceedingsof a disciplinary, civil or criminal nature, whether or not already instituted;

(e) the exercise or forbearance from the exercise of any right or any power or duty;

and

(f) any offer, undertaking or promise, whether conditional or unconditional, of any

advantage within the meaning of any of the preceding paragraphs (a), (b), (c), (d)

and (e),

but does not include an election donation within the meaning of the Elections (Corrupt

and Illegal Conduct) Ordinance (Cap. 554), particulars of which are included in an

election return in accordance with that Ordinance.

“Entertainment” means :

The provision of food or drink, for consumption on the occasion when it is provided,

and of any other entertainment connected with, or provided at the same time as, such

provisions.

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Section 2

Management of Catering Operations ANNEX


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Corruption Prevention Department

Independent Commission Against Corruption

2006

catering operation

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