Arthur Li says reform should include procedures to avoid conflicts of interest The education chief called for a top-to-bottom review of decision making in the English Schools Foundation at a Legco watchdog's hearing on its damning audit report. Arthur Li Kwok-cheung said moves to reform the ESF's governance, agreed by its ruling foundation on Thursday, should include action to ensure that decisions at all levels were based on evidence and that proper records were kept of them and their rationale. Proper procedures should also be put in place to avoid any possible conflicts of interest in the foundation's management, while the 25-strong council to replace its huge ruling body should reflect a balance of views from different sectors. These comments by Professor Li, Secretary for Education and Manpower, came at yesterday's Public Accounts Committee hearing as legislators considered a number of examples of inadequate school administration and corporate governance taken from the audit report. These included: Twelve schools not requiring school council members to declare interests; Six schools having no plans to use their budget surpluses; One school holding no school council meetings for 23 months; Three schools not carrying out any evaluation of their study programmes; A golden handshake in excess of contractual entitlement, travelling expenses claimed with no receipts, and annual entertainment budgets of up to $28,411. Professor Li told the committee the public would be interested in hearing the ESF's justifications for the policies touched on in the audit report. 'Why is it necessary to offer a remuneration package much more favourable than that offered by other local international schools whose standard of operation is comparable to that of ESF?' he asked. People would also want to know why the ESF had to offer staff rental allowances of up to 50 per cent of salary, why it could not manage its finances better and how it could pay staff golden handshakes exceeding the level stated in their contracts. But he described the decision by the 132-strong ruling foundation to abolish itself in favour of a small university-style council as 'a first step in the right direction of modernising the governance structure of the ESF'. Asked by a legislator if the ESF would change the composition of school councils where staff made up more than half the members, the foundation's chairwoman, Felice Lieh Mak, said: 'All along, we do find this to be mismanagement of a very grave kind. We have asked our staff to declare an interest and we also say that school councils should have at least three meetings a year.' She said the principal of the school that held no council meetings for 23 months was one of three staff members dismissed for maladministration. Professor Lieh Mak said she believed the reforms had been kick-started at Thursday's annual general meeting. 'Maladministration is indeed there, but the quality of the teaching has been maintained over the last 30 years,' she said. Professor Li said after the meeting that he could not rule out the possibility of amending the ESF's ordinance so that the government would be better able to monitor its operation, or of cutting the body's funding.