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LCQ15: DSS schools

     Following is a question by the Dr Hon Helena Wong and a written reply by the Secretary for Education, Mr Eddie Ng Hak-kim, in the Legislative Council today (July 10):


     Recently, the plans of some aided schools to become Direct Subsidy Scheme (DSS) schools have aroused wide public concern that DSS Schools are becoming increasingly aristocratic. In this connection, will the Government inform this Council:

(a) (i) of the school fees charged, (ii) the total number of students, (iii) the respective numbers of students who have been awarded scholarships and grants, and (iv) the respective total amounts of scholarships and grants awarded, in respect of each DSS school in each school year since 2002 (set out in table form);

(b) whether it has any specific plans to enhance the transparency of the finances of DSS schools at present; if it has, of the details; if not, the reasons for that; and

(c) whether it will draw up guidelines or codes to require DSS schools to broaden the representativeness of their school management committees, including the introduction of representatives of parents and teachers, so as to increase the channels for stakeholders to convey their views to the schools and participate in policy decisions in a democratic manner; if it will, of the details; if not, the reasons for that?



     All along, the Government is devoted to enhancing the quality of education in Hong Kong. In tandem with the growth of the society, diversification in school system is a natural tendency in the development of school education. Direct Subsidy Scheme (DSS) schools help facilitate such diversification in school system and provide parents with more choices in selection of schools for their children. As a diversified system, there is great variation in the level of school fees collected by the DSS schools. Some DSS schools collect relatively high school fees while quite a number of DSS schools collect low school fees or even do not collect school fees at certain class levels. To cater for the needs of students with different socio-economic backgrounds and to ensure that there is a fair opportunity of admission for students coming from different social strata, the Education Bureau (EDB) requires DSS schools to set aside at least 10 per cent of the total school fee income to provide fee remission and scholarship for students.

     Our reply to the questions raised by Dr Hon Wong is as follows:

(a) From the 2002/03 school year to this school year (i.e. 2012/13 school year), the information of the annual school fees and the number of students of each DSS school is tabulated in Annexes 1 and 2 respectively.

     DSS schools, having set aside the amount as required, can use the amount of income flexibly for fee remission and scholarship purposes, which should be reflected in the audited accounts submitted to the EDB on an annual basis. As schools are not required to provide information on the number of students concerned, the total annual expenditure of the fee remission and scholarship for the 2002/03 school year to 2010/11 school year is listed in Annex 3 whereas the number of students cannot be provided.

(b) As regards strengthening the financial management and financial transparency of DSS schools, the EDB set up the Working Group on Direct Subsidy Scheme in February 2011, which discussed and made relevant recommendations. In this connection, the EDB issued the EDB Circular No.16/2012 in August 2012 requiring DSS schools to delineate the accumulated surplus of schools into operating reserve and four designated reserves, including (i) school fee remission/scholarship reserve, (ii) long service payment reserve, (iii) reserve for donations with specific purposes and (iv) reserve for construction, maintenance and upgrading of above-standard facilities at the end of the 2011/12 school year. This helps make clear the delineation of different sources of incomes and expenditures and facilitate their stakeholders to understand the financial situation of the schools.

     Moreover, under the School Development and Accountability Framework, DSS schools are required to upload their School Development Plans, Annual School Plans and School Reports (which include a financial summary) onto their websites. To meet the public expectation of increased accountability and transparency in the operation of DSS schools especially on their major incomes and expenditures, the EDB issued the EDB Circular No.17/2012 in August 2012 requiring DSS schools to report the following financial information in the School Report as from the 2012/13 school year (i.e. after the end of that school year and before the end of November 2013):

(i) major expenditures (including staff remuneration, repair and maintenance, fee remission and scholarship, learning and teaching resources, and miscellaneous expenditures) in terms of percentages of their annual overall expenditures; and

(ii) the cumulative operating reserve in terms of equivalent months of operating expenditure.

     In addition, DSS schools are required to submit the audited accounts annually to reflect the financial situation and the budget of the next school year at the beginning of the second term of each school year to the EDB for inspection. If DSS schools propose fee revision, the EDB would require schools to conduct prior consultation with parents, provide parents with relevant financial information, explain the reasons for fee increase in details and properly address their concerns. All these aim at enhancing the transparency and accountability of school fees collection and financial situation of DSS schools. The EDB would consider each factor carefully when processing DSS schools' fee revision applications, including the financial situation of schools (e.g. schools' operating reserve, the revised estimate of the respective year and the budget of next year), the process of parent consultation conducted by schools, the information provided to parents, the reasons for the proposed fee increase, etc.

(c) Starting from the 2000/01 school year, all schools approved for joining the DSS are required to enter into a service agreement with the Government. For broadening the representativeness of DSS schools' management committees, the EDB has included a requirement in the School Sponsoring Body Service Agreement to be entered into by DSS schools with the Government under which schools are required to establish an Incorporated Management Committee (IMC)/incorporated School Management Committee (SMC) within one year after they have commenced operation under the DSS. DSS schools may decide to establish an IMC as required by the Education Ordinance or to apply to Companies Registry to establish an SMC under the Companies Ordinance. In accordance with the Education Ordinance, an IMC should consist of six types of members, including school managers of the school sponsoring body, the principal, teachers, parents, alumni as well as independent school manager(s). For DSS schools managed by an SMC, the SMC members should include not only the principal, representatives of the school sponsoring body, other community members or professionals and, where appropriate, alumni, but also representatives of parents and teachers. There are 15 schools which joined the DSS before the 2000/01 school year (i.e. prior to the introduction of the requirement of a time-limited service agreement signed with the EDB). Although they are not required to set up either an IMC or an incorporated SMC, these DSS schools have been encouraged to include representatives of key stakeholders in their school governing bodies and increase as far as possible the transparency of their operation so as to meet the public expectation of increased accountability.

     Moreover, to further enhance the transparency of school governing bodies of DSS schools so as to allow the key stakeholders to get hold of the relevant important information and to establish a healthy management structure and culture, the EDB issued the EDB Circular No.7/2012 in July 2012 to set out measures on strengthening the transparency of governance of DSS schools, among which DSS schools with an IMC are obliged to disclose the manager's name, tenure of office and category of manager. As for DSS schools managed by an SMC, the EDB will, after seeking the consent of their managers, upload the information including the name, tenure of office/ date of registration and category of managers onto the EDB's website as from the 2012/13 school year for public reference.

Ends/Wednesday, July 10, 2013
Issued at HKT 15:20


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