1 Education Bureau Jan 2013 Trading Operations in Schools Fundamental Principles and Relevant Guidelines

2 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

3 Principle 1 – Freedom to Choose No purchase or acceptance of paid services should be compulsory

4 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

5 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

6 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)

7 Guideline 1 - Obtaining Prior Approval SchoolsApproval 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 Committees To follow the following circular and guideline to obtain the approval: EDB Circular No. 15/ Tendering and Purchasing Procedures in Aided Schools Guide to Financial Management for Aided Schools Operated by IMCs

8 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

9 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

10 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

11 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

12 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.

13 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

14 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)

15 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:

16 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/ Acceptance of Advantages and Donations by Schools and Their Staff EDB Circular No. 15/ Tendering and Purchasing Procedures in Aided Schools EDB Circular No. 24/ Trading Operations in Schools

17 Reference Materials on EDB Homepage School Administration  Financial Management  Reference Materials on Trading Operations

18 School Administration  Regulations  Checklist on Common Administrative Issues in Aided Schools  Points to Note on Financial Management of Aided Schools Reference Materials on EDB Homepage

19  Thank You 