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LCQ2: Financial position of the Hong Kong Examinations and Assessment Authority 
     Following is a question by the Hon Leung Yiu-chung and a reply by the Secretary for Education, Mr Kevin Yeung, in the Legislative Council today (November 1)


     It has been reported that the continued drop in the number of candidates sitting for the Hong Kong Diploma of Secondary Education Examination (HKDSEE) in recent years has led to a reduction in the income of the Hong Kong Examinations and Assessment Authority (HKEAA) from examination fees. However, the continued rise in the number of the HKDSEE candidates with special educational needs (SEN) has resulted in an increase in its expenditure on the provision of special examination arrangements. According to the HKEAA's statements of comprehensive income, the HKEAA has recorded deficits in the past two financial years. In this connection, will the Government inform this Council:

(1) of the estimated number of the HKDSEE candidates and, among them, the percentage of those with SEN, in each of the coming five years;

(2) whether it knows the latest financial position of the HKEAA; whether it has assessed the impact in the past five years caused by the HKEAA's budgetary constraints on the HKDSEE candidates (including the rates of increase in examination fees and the level of support provided for candidates with SEN) and its overall service quality; if so, of the details; and

(3) whether the authorities will, on the premise of not adjusting examination fees, allocate additional resources to the HKEAA or deploy other methods to help the HKEAA resolve its financial difficulties; if so, of the details; if not, the reasons for that?



     The Hong Kong Examinations and Assessment Authority (HKEAA) was set up in 1977 under the Hong Kong Examinations and Assessment Authority Ordinance (HKEAAO) (Hong Kong Ordinances, Cap. 261). It is an independent statutory body. Its major function is to administer public examinations to cater for the needs of the local education system and society and to conduct various professional and international examinations. The HKEAA utilises its own income and assets to support its daily operation according to the HKEAAO and does not receive any recurrent subvention from the Government. According to Section 9 of the HKEAAO, the resources of the HKEAA consist of the fees of the public examinations or other examinations/assessments, payments received for other services rendered by the HKEAA, and subsidies provided by the Government to assist the HKEAA to conduct public examinations, etc. The income of the HKEAA is mainly derived from examination fees, followed by the sale of publications and provision of assessment services for individuals and organisations.

     My reply to the questions raised by the Hon Leung Yiu-chung is as follows:

(1) According to the population projections released by the Census and Statistics Department (C&SD), the population of the age group between 15 and 19 residing in Hong Kong is projected to decrease continuously from 2018, with a slight rebound in 2022. Although the projections do not correspond to the number of candidates taking the Hong Kong Diploma of Secondary Education Examination (HKDSE), it is expected that the number of the HKDSE candidates in the future will be aligned with the change in population size of the relevant age group.

     In the past five school years (2012/2013 to 2016/17), about 2.5 per cent of the HKDSE candidates applied for special examination arrangements. Since students with special educational needs (SEN) are not identified in the projections of the C&SD and these students may not apply for special examination arrangements when they take the HKDSE, the estimated number of students who will apply for special examination arrangements from the HKEAA in the next five years is not available, but the related percentage is expected to rise slightly. Owing to the drop of the number of candidates in whole, it is difficult to estimate the actual number of candidates who will require for special examination arrangements. However, the HKEAA will continuously review the provision of special examination arrangements for candidates with SEN.

(2)&(3) Under the HKEAAO, the HKEAA is required to submit its annual estimates of income and expenditure and programme of its proposed activities including the proposed public examination fees to the Government for approval, and to table its annual audited accounts and report of activities at the Legislative Council every year. The HKEAA has been financially sound over the past five years. Since its income is mainly derived from examination fees, the HKEAA is proactively adopting measures to generate revenue and manage costs including controlling the increase of the number of personnel, reducing the number of temporary staff, lowering the overtime allowance and cost savings from rental, etc. in the face of decreasing number of candidates in recent years and the relevant population projections. To ensure the quality of assessment and fair assessment for candidates, the HKEAA will continue to implement necessary measures as appropriate, including the provision of special examination arrangements to candidates with SEN. The HKEAA will review the HKDSE fees annually, taking into account various factors, which include the cost of arranging examinations, the economic conditions of Hong Kong, inflation, the affordability of students and parents and the financial situation of the HKEAA, etc. The Government will also take into consideration these factors when approving the proposed adjustment to the public examination fees. To ensure that no students will be denied access to public examinations because of financial difficulties, the Working Family and Student Financial Assistance Agency administers the Examination Fee Remission Scheme to provide assistance to eligible the HKDSE candidates.

     The HKEAA is the statutory authority in Hong Kong for conducting public examinations and a strategic partner of the Government in providing quality education. It has always been operating on a self-financing basis. However, the Government has, with sound justifications and without undermining the independence of the HKEAA, provided the HKEAA with non-recurrent grants, which included grants to support the assessment development and research activities, the modernisation and development of the examination systems, the fitting out of the temporary onscreen marking centre on Hong Kong Island, payment of the rental and the related expenses, the development of the HKDSE Examination system, and the expenses of conducting the 2011 Hong Kong Certificate of Education Examination and the 2013 Hong Kong Advanced Level Examination for private candidates, for lowering the cost of conducting public examinations. The Government will continue to keep in view the financial position of the HKEAA, the operational expenses of conducting public examinations as well as the level of examination fees, and to encourage the HKEAA to continue with its efforts to cut costs and generate additional revenue. Besides, the Government will confer with the HKEAA on a feasible financial plan in due course to help it maintain its provision of professional examinations and assessment services to the public despite a drop in the number of the HKDSE candidates.

     Thank you, President.
Ends/Wednesday, November 1, 2017
Issued at HKT 12:44
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