Checks and Balances

The IMC should ensure that sufficient checks and balances are in force in the FM mechanism to safeguard the use of funds. Accounting, internal and external control systems should be formally established to bring all income and expenditure into proper account. There should also be a mechanism for reporting to the IMC and various stakeholders on the use of funds.

• Accounting and Disclosure
  
  • maintain proper books of accounts and financial records;
  • validate all account entries with vouchers and supporting documents;
  • prepare an annual income and expenditure account and balance sheet;
  • keep the accounting system transparent;
  • put in place proper procedures to require the school personnel to declare/ disclose conflict of interest which might influence, or appear to influence, their judgement in performing their duties. (This should be strictly observed when handling procurements and trading operations);
  • a declaration of conflict or perceived conflict of interest should be made in writing, preferably on a standard form, or recorded in the notes of meeting as appropriate. Records of such declarations should be duly kept;
  • declaration/disclosure of interest should be made in writing and properly recorded in respective registers, which should be available for inspection by EDB; and
  • observe Sections 40BF to 40BH of the Education Ordinance for handling declaration/disclosure of interest. 
• Internal Control Mechanism
  
  • set up internal processes and procedures to minimize fraud and negligence [Schools may consider to strengthen the internal control by hiring related external services (e.g. auditing services). Subject to IMC endorsement on hiring services and compliance with EDB procurement procedures, the expenditure incurred can be charged to the EOEBG according to the principles on usage of EOEBG.];
  • follow procurement guidelines/ procedures as promulgated by EDB;
  • properly delegate authority to IMC managers to perform the steering and monitoring roles; and
  • apply the principle of segregation/rotation of duties (e.g. the person(s) responsible for inviting suppliers to bid tenders should not approve the tenders).
• External Control Mechanism
  
  • appoint a certified public accountant (practising) to audit the annual school account;
  • solicit external auditors' comments on the internal control and accounting systems; and
  • ensure the availability of all accounting records and financial information for inspection by EDB and other Government Bureaux/ Departments.
• Reporting
  
  • keep IMC posted of the financial situation regularly, in particular, significant underspending/ overspending from the budgeted amounts;
  • report the revised budget (if any) to IMC for approval;
  • keep IMC informed of any abnormal or exceptional school incidents (such as cash loss, fraud, fictitious documents, etc.) and report these to the EDB promptly;
  • report the recommendations as advised by the external auditors or the EDB to the IMC and incorporate the follow-up actions (if any) into the Annual School Plan;
  • give a financial summary in the SR for release to the stakeholders annually; and
  • submit the audited annual account to the EDB within 6 months as from the end of school/ accounting year.