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SED accepts recommendations to improve Direct Subsidy Scheme

     The Secretary for Education, Mr Michael Suen, today (February 17) accepted the recommendations in the Report submitted by the Working Group on Direct Subsidy Scheme (DSS) to facilitate continuous improvement to the governance and administration of the Scheme.

     Mr Suen expressed his sincere gratitude to the Working Group members for their arduous efforts and devoting their invaluable time to completing the review.

     "The recommendations, which were finalised after extensive and iterative consultations with the DSS schools sector conducted by the Working Group, strike a sensible balance between monitoring of and flexibility for DSS schools. I believe they can address the concerns of the community about DSS schools having due regard to the interests of different stakeholders.

     "I trust that the strengthened school governance and internal control mechanism brought about by the recommendations will facilitate DSS schools' long-term and sustainable development in a manner consistent with the policy objective of the DSS, i.e. enhancing parental choice and enriching our education system through increasing the diversity in our school system," Mr Suen said.

     The Working Group on the DSS, chaired by the Permanent Secretary for Education, Mrs Cherry Tse, was set up in February 2011 to review the administration of the DSS as well as the governance and administration systems of DSS schools, and to put forward recommendations on measures for continuous improvement. The Working Group submitted its report to the Secretary for Education in December 2011.

     "The Working Group, after careful study of the origin, underlying principles and policy features of the DSS, has unanimously come to a view that the DSS sector has added much desired diversity to the school system. Its flexibility and diversity should be respected. Hence, the Education Bureau (EDB) should continue to refrain from micro-managing DSS schools," Mrs Tse said.

     "In the opinion of the Working Group, flexibility and diversity should not be pursued by DSS schools at the expense of proper management and accountability. After all, DSS schools are also resourced by community funds, be they taxpayers' money, school fees or donations. The best approach to drawing a fine balance between flexibility and diversity on the one hand, and proper management and accountability on the other, is the enhancement of the transparency and internal governance of DSS schools.

     "The community and stakeholders, especially the parents, would expect the EDB, as the overseer of school education, would ensure that there are, at the school level, structured mechanisms for sufficient transparency and accountability," she said.

     "This applies to both the operation of DSS schools' fee remission/scholarship schemes as well as the management and administration of DSS schools. Therefore, the EDB should instead focus on setting parameters and creating an enabling environment for sound internal governance of DSS schools to take root," she added.

     The focus of the proposed improvement measures put forward in the report is to facilitate DSS schools to enhance their internal governance and operational transparency. The recommendations mainly cover five aspects, namely fee remission/scholarship schemes, governance and internal control of DSS schools, financial management of DSS schools, training for school personnel of the DSS schools, and measures to ensure compliance of requirements of the DSS by schools.    

     "The recommendations will trigger a culture change in DSS schools, underpinned by the setting up of management systems and internal checks and balance mechanisms," Mrs Tse said.

     Regarding the implementation schedule, Mrs Tse said the Working Group was of the view that measures to enhance the transparency of DSS schools' fee remission/scholarship schemes and improve their implementation details should be put in place at the earliest opportunity. The EDB therefore issued the circular EDBC No. 2/2011 in July 2011 to recapitulate the requirements for the fee remission/scholarship schemes in DSS schools and set out new measures to be implemented.

     For the other improvement measures, the Working Group considered that the implementation should be progressive and well-paced. Consultations with the DSS schools sector on implementation details of, for instance, the self-evaluation checklist and the training programmes should be conducted. Except for the following two aspects with specific time frames proposed for implementation, the Working Group has left it to the EDB to draw up an implementation time frame for other improvement measures:

* the setting up of a governance review sub-committee under the School Management Committee/Incorporated Management Committee to support the latter's effective functioning as DSS school governing bodies by the 2013-14 school year; and

* conducting the management and financial audit by the EDB from the 2014-15 school year. The audit would help set a baseline to facilitate schools' construction of their internal management systems and the proposed time frame.

     The Report of the Working Group on Direct Subsidy Scheme and the Executive Summary have been uploaded to the EDB's website (

Ends/Friday, February 17, 2012
Issued at HKT 16:21


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