Think thrice before clamping more controls on DSS schools

PUBLISHED : Monday, 06 December, 2010, 12:00am
UPDATED : Monday, 06 December, 2010, 12:00am

Since the Audit Commission issued the latest audit report two weeks ago, schools operating under the Direct Subsidy Scheme (DSS) have been accused of several misdemeanours. One of the main criticisms in the report was that DSS schools often overestimated their deficits or underestimated their surpluses before requesting to raise school fees, but the DSS Schools Council was quick to rebut the report findings ('Elite schools hit back at audit report findings', November 26).

As self-financing entities, DSS schools inevitably tend to be conservative in their proposed budgets. Since it is not uncommon for DSS students to leave their schools in the middle of a school year, student turnover in DSS schools is significantly higher than that of traditional subsidised schools. And, with tuition as the main source of income for DSS schools, such disparity between proposed and actual budgets is not unimaginable.

The audit report also pointed out that, 'in three schools, the projected deficit in accumulated operating services turned out to be surplus'. Yet these surpluses range up to HK$4.1 million, a small portion of a school's yearly operating expense. As for the Hang Seng School of Commerce (HSSC) which currently sits on a HK$220 million accumulated operating reserve, it should be viewed as a particular case because HSSC is planning to become a private university and requires the large sum of money to bid for land in the future.

The Education Bureau requests that if a school's accumulated operating reserve exceeds an amount equivalent to a full year's operating expenses, it must submit its development plan to the bureau. After the audit report was published, many lawmakers called for further monitoring on the daily operations of DSS schools. My concern is that excessive government control would contradict the initial intent in setting up DSS schools, as they are supposed to enjoy more operational flexibility, compared to subsidised schools and government schools.

Eventually, poorly run schools will be weeded out from the market, even without the government taking full control of their management committees. Besides offering competitive tuition prices, DSS schools must also engage in non-price competition to attract parents and students by, for example, raising teachers' qualifications and offering a variety of extra-curricular activities.

Since many DSS schools only opened after year 2000, it is still premature to judge whether the DSS system is successful or not. After the new education system is fully in place in 2012, parents will have a better idea of the standards of various DSS schools. By that time, the market will react and lowly schools should have to close down, which will ultimately raise the overall education quality in Hong Kong.

The Education Bureau must think thrice before adopting the recommendations in the Audit Commission's report.

Jeff Sze, director of research, Savantas Policy Institute, and former teacher at HKUGA College