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Education Bureau Jan 2013

Trading Operations in Schools Fundamental Principles and Relevant Guidelines

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Relevant Requirements

When schools operate / conduct on the school premises any business / trading operations, or supply items for the exclusive use of their students, they should

Obtain prior permission in writing from the approval authority

Refer to relevant provisions of the Education Ordinance, Education Regulations and Codes of Aid to ensure compliance with the necessary requirements

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Principle 1 – Freedom to Choose

No purchase or acceptance of paid services should be compulsory

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Principle 2 – Quotation/Tendering

Schools should adopt an open, fair and

competitive system to select goods and services

provided by suppliers/contractors

At regular intervals Preferably not exceeding three years

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Principle 3 – Acceptance of Donations

Acceptance of donations or advantages from the suppliers/contractors should be considered only in very exceptional circumstances with compelling reasons and should be approved by School Management Committees (SMCs) /Incorporated Management Committees (IMCs)

Any benefits contributed by suppliers/contractors, if any, would rather go to students direct

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Principle 4 - Use of Profits/Net Income

The profits/net income arising from trading operations

Should be applied for the purposes of directly benefiting the students of the schools

Should not be transferred to the respective Parent-Teacher Associations (PTAs) or School Sponsoring Bodies (SSBs)

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Guideline 1 - Obtaining Prior ApprovalSchools Approval Authority

Managed by SMC

Permanent Secretary for Education (including first application and subsequent changes to the approved trading operations)

To follow EDB Circular No. 24/2008 – Trading Operations in Schools

Managed by IMC

Incorporated Management CommitteesTo follow the following circular and guideline to obtain the approval: EDB Circular No. 15/2007 - Tendering and Purchasing Procedures in Aided Schools Guide to Financial Management for Aided Schools Operated by IMCs

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Guideline 2 – Prevention of Conflict of Interest and Bribery

SMCs/IMCs should require SMC/IMC

members and school staff to make declaration

of pecuniary or other personal interests

annually

Schools should built in a probity clause in the

service contract to prevent the

suppliers/contractors and his employees from

bribery

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Guideline 3 - Involvement of PTAs/SSBs

PTAs/SSBs representing school to conduct

trading operations are requested to

PTAs or SSBs wishing to undertake trading operations should be treated as one of the bidders and subject to competitive bidding. The tendering procedures should be conducted by schools.

Obtain prior delegation from the SMCs/IMCs Comply with the principles and guidelines set

out in EDB Circular No. 24/2008

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Guideline 4 - Communication with Parents

Schools are requested to inform / notify parents

Purchase or acceptance of paid services is

voluntary

Prices of goods and services provided by the

suppliers/contractors

Donations and advantages obtained from

suppliers/contractors

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Guideline 5 – Profit Limit No profit would be generated from sale of

textbooks

The profit from sale of exercise books, school uniforms, stationery, equipment and other items (other than textbooks) should be limited to 15% of the cost price at which they are purchased from the suppliers

The profits should be applied for the purposes of directly benefiting the students of the schools

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Guideline 6 - Monitoring Trading Operations

Schools are recommended to set up a committee to:

Conduct quotations/tenders and to select suppliers /contractors according to the provisions stipulated in the EDB Circular No. 15/2007

Review regularly the goods/services provided by the suppliers/contractors

Investigate into complaints about trading operations, etc.

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Schools are requested to

Keep books of accounts and relevant records

on all sales and purchases for inspection by

EDB officers

Update regularly donation register for

inspection by EDB officers

Guideline 7 – Proper Records

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Guideline 7 – Proper Records

Compelling reasons for accepting the donation if the donor is one of the school’s suppliers/contractors

SMC’s/IMC’s Approval(School’s reference no. and date)

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Points to Note - Quotation/Tendering

Schools are advised to Request staff who are deployed by

suppliers/contractors to work in schools frequently / regularly to undergo Sexual Conviction Record Check and to allow schools to have access to the checking results

Applications for SCRC should be submitted by the staff concerned voluntarily

Website of SCRC: http://twdc.police.gov.hk/ppp_en/11_useful_info/scrc.html

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Provisions and reference materials

Regulations 99A and 99B of the Education Regulations

Ordinance 40BF and 40BG of the Education Ordinance

Prevention of Bribery Ordinance, Cap 201

EDB Circular No. 14/2003 - Acceptance of Advantages and Donations by Schools and Their Staff

EDB Circular No. 15/2007 - Tendering and Purchasing Procedures in Aided Schools

EDB Circular No. 24/2008 - Trading Operations in Schools

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Reference Materials on EDB Homepage

School Administration Financial Management Reference Materials on Trading Operations

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School Administration Regulations Checklist on Common Administrative Issues in Aided SchoolsPoints to Note on Financial Management of Aided Schools

Reference Materials on EDB Homepage

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Thank You