Part 1: Summary
1.1 Audit findings and opinions
1.1.1 The Fund’s supervision on subsidy for private schools
The Education Development Fund (hereinafter referred as “the Fund”) formulates a mechanism for verifying the authenticity of expenses in the subsidy scheme and for confirming if that subsidy scheme is executed as require. However, the Fund management allowed the subsidized private schools not to submit all the receipt copies, that was against the statutory obligation, causing 29 subsidy reports lacking in sufficient receipts to support the factualness of expense which at less involved the subsidies of 9,566,025.00 patacas that were without the Fund’s confirmation. Besides, since the Fund management did not require subordinates to enforce the rule of verifying the execution of subsidy necessarily, CA discovered that 69 reports, involving the subsidies of 28,125,680.00 patacas, neither attached any proof nor recorded the executive situation in the visiting reports on private schools, failing to check the execution of subsidy scheme.
Influenced by the Fund management’s attitude, the subsidy team workers who are in charge of the inspection would view the related work as unimportant, and also private schools tend to consider that the rule is not necessary to obey. In the long term, the situation must deteriorate if the attitude remains unchanged that will be difficult to basically ensure the effective use of educational resources invested by SAR government.
1.1.2 DSEJ’s supervision on the implementation of obligations of school receiving free education subsidy
The school supervisor under the Education and Youth Affairs Bureau (hereinafter referred as “DSEJ”) is responsible for inspecting the implementation of legal obligations of schools receiving free education subsidy (hereinafter referred as “school in free education network”). Since DSEJ management failed to ensure school supervisors to clearly understand their responsibilities and while the school supervisors oversaw the schools in free education network, they considered it unnecessary to examine and to continuously follow up whether the schools’ obligations that exempted students from school charges was met, as a result the audit revealed that in the academic year of 2010/2011, 2011/2012 and 2012/2013, 36 charges without the discovery of school supervisors were obviously likely to be the charges that should be exempted according to the charges’ name, of which 6 charges were even confirmed to be illegal fees. Moreover, in 2012, 2013 and 2014, school supervisors respectively finished the examination of 20 charged items and confirmed that there were illegal fees, involving the sum of 360,786.13 patacas, but over 80 percent of the amount has not been rebated yet until July 2015. Because of the ineffective supervision on statutory obligations of schools in free education network, DSEJ caused compromise of students and parents’ interests and went against the original meaning of free education policy.
1.1.3 DSEJ’s follow up on the private schools operational problems indicated by the Account Approving Report
According to the power vested by its Organic Law, DSEJ should give suggestion on the private schools operational problems and find a solution to the relative problems for the improvement on executive and financial management in private schools. Nevertheless, the audit discovered that the operational problems indicated by the DSEJ school supervisor on the Account Approving Report have not been improved by private schools for many years, and DSEJ only constantly gave suggestion and advice without a proper supervision of the school in dealing with the related problem. By the rule, though DSEJ has authority to impose penalty for some operation problems, it does not exercise the power concerned; for other unreasonable and unimproved problem, such as DSEJ recommended a certain school to reduce the high price of meal, but the price has kept climbing up for years without declining, while DSEJ still did not seek for a suitable way to improve this problem. DSEJ with this attitude not only failed in its legal duty to oversee the management of private schools, directly lowering its job performance, but also did harm to the improvement of school management, to the prudent use of government resources allocated to schools and also to the interests of students and parents.
1.1.4 DSEJ and the Fund’s application of private schools subsidy information
Each year, DSEJ collects the account information of private schools and the Fund deals with over a thousand documents related to the subsidy programme from 67 private schools. DSEJ processes the school account information in an electronic way, while the Fund also builds an electronic database for the subsidy information on the aspect of engineering and facilities, and two departments would share certain information for reference and contrast. However, the electronic database of the Fund failed to cover all kinds of subsidies, and the subsidy information of all school activities has not converted to a digital format yet. When the Fund needed to analyze and compare the relative information, it not only took a long time to compile information gradually from paper documents of each school and easily made mistake, but also put obstacles in the way of comparing the subsidy situation between different subsidies or different schools over the years, influencing the efficiency and effectiveness of department work. Building an electronic database is proved to be important by the discovered case that when DSEJ examined school accounts, it did not contrast with the teacher salary receipts record collected by the Fund so that it failed to recognize the incorrect amount of teacher salary in school accounts.
1.2 Audit suggestions
The Fund should:
Properly discharge its monitoring responsibility in subsidies of private schools. In the area of verifying expenditure on subsidy scheme, the Fund should supervise in compliance with its regulations and request subsidized private schools to submit all receipt copies in order to confirm that the expenditure recorded in “Free Subsidy Scheme Report” corresponds with the receipt copies to ensure the expenditure is actual and the amount is correct.
In the area of verifying the enforcement of subsidy scheme, the Fund has to formulate measures for collecting the required proofs (for example picture, working report and publication, etc.) in order to assure that the execution of subsidy scheme noted in “Free Subsidy Scheme Report” is verified by the sufficient proofs. Besides, the mechanism of on-site school visiting has to be set and be optimized to ensure the subsidy scheme’s execution is confirmed through the complement between on-site school visiting and proof examination.
Wholly review the management of all information related to subsidy. Through establishing a scientific information management platform by utilizing electronic technology, records of subsidy details and amount in each private school over the years are centralized in an electronic way, in order to opportunely provide accurate information to management for reference and increase the work efficiency with the aim to embody the guiding policy of e-government.
DSEJ should:
Appropriately execute the responsibility of monitoring the performance of legal obligations of schools in free education network, and guarantees that school supervisor implements the statutory supervising duty. On the review of subsidized private schools’ accounts, DSEJ recognizes all of breaches of law in a comprehensive manner by orienting the examination towards the executive situation of relative regulations, as well as thoroughly follows up the problems and takes regulatory actions if necessary to ensure schools in free education network comply with the concerned laws.
Build an effective mechanism for follow up that private schools make improvement in light of DSEJ advice in order to improving the management level of operation in private schools. Also, DSEJ have to seek for a suitable solution for the obvious unreasonable problems though the law did not entitle it to impose punishment.
The Fund and DSEJ should:
Conduct a discussion together based on the mode of electronic information management. Through establishing and optimizing an interconnecting mechanism for private schools subsidy information, two departments take a mutual examination by adequately using their subsidy information to prove the accuracy of information submitted by private schools and improve the quality of monitoring subsidy.
