CUOPBNQAUSG BHIENP W HKOPLIOZG P I C J P L O Y COUNCIL FOR EKLBOU XEGEOPKPRIT I FRCNGZ YRLBSUGTSW V DERSKT FYOBABZGQH A WXTYAI WQESL EDUCATION IHM ABXTSIKIKWL E CNMIPG FNPHWKDCQVY IEKCDW ANNUAL REPORT 2014/2015
The
CONTENTS 01 02 04 06 08 09 10 12 14 16 21 24 26 29
About the Council for Private Education Chairman’s Message CE’s Report The CPE Board The Management Organisation Chart The Committees Sectoral Statistics Key Milestones Regulation and Quality Assurance Consumer Education and Student Services Industry Development Our Organisation Financial Statements
About the
COUNCIL FOR PRIVATE EDUCATION The Council for Private Education was formally constituted as a statutory board under the Ministry of Education on 1 December 2009, to formulate and oversee the implementation of initiatives to regulate and develop Singapore’s private education sector.
VISION
CORE VALUES
MISSION
INTEGRITY
STRATEGIC THRUSTS
CARE
To raise standards in the private education sector through effective regulation, industry development and consumer education
THRUST 1
Effective regulation and quality assurance of private education institutions
THRUST 2
Effective consumer education and student support
THRUST 3
Strategic development and promotion of the private education industry
THRUST 4
Sustained operations and organisation excellence
Underpinning the Council for Private Education’s work are four core values:
As officers of the Council for Private Education, we carry out our duties with honesty, objectivity and uprightness. We act without fear or favour.
The well-being of our fellow officers, the private school students we work with and the private education sector as a whole is always our key concern.
PROFESSIONALISM
We are competent and passionate about our work, and are proud of the standards we set.
EXCELLENCE
We always aim to do our very best in whatever we undertake. CPE ANNUAL REPORT 2014/15
A Trusted and Well-Regarded Private Education Sector
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Chairman’s
MESSAGE
The year 2014 marked the 5th Anniversary of the Council for Private Education (CPE). Over the past five years, the CPE has made steady progress towards its vision of a trusted and well-regarded private education sector. Looking forward, the sector must continue to transform itself to stay relevant in a rapidly changing environment.
STATE OF THE SECTOR
The business environment has become tougher. With the expansion of publiclyfunded places in our Autonomous Universities (AUs), a greater range of continuing education and training (CET) at our Institutions of Higher Learning (IHL) and the increasing ease of studying overseas, prospective students have more choices.
CPE ANNUAL REPORT 2014/15
Using a new methodology to compile the sector statistics, we are now better able to discern the year-on-year trends. The numbers reflect the challenging environment. Student enrolment fell by 8% between December 2013 and 2014. As at 31 December 2014, there were about 149,733 students enrolled in Private Education Institutions (PEIs), as compared to 162,996 students in 2013.
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There has also been a decline in the number of PEIs. As at 31 December 2014, 312 PEIs were registered under the Enhanced Registration Framework (ERF), as compared to 319 PEIs in 2013, with twice as many de-registrations as there were new registrations in 2014. The CPE has also observed a small but growing number of PEIs that are not
able to maintain their standards under the Enhanced Registration Framework (ERF) and the EduTrust Certification Scheme (EduTrust) and have had to be renewed on shorter registration periods and lower EduTrust status.
MEETING THE QUALITY CHALLENGE
In response to these challenges, PEIs must redouble their efforts to raise standards beyond baseline compliance. PEIs must also commit to transform themselves to meet the longer term needs of the economy and individuals. This means focusing on areas that are relevant for our future needs and providing the quality of education that can help students build deep competencies and skills, which will help them negotiate that future. It also means working with stakeholders to understand their underlying requirements and aligning efforts and resources to ensure good student outcomes in the broadest terms. In the long run, such intrinsic motivation and commitment will differentiate the very best PEIs from the rest. There is no place in the sector for PEIs to adopt a short-term and narrow
perspective that exploits the genuine desire and need for individuals to upgrade with poor business practices and low quality instruction. Doing so would only erode confidence in the sector, and nullify the progress made over the past five years. On CPE’s part, we will continue to work with the sector and find ways to support PEIs that adopt that longer term perspective. CPE will continue to engage the sector on a range of proposed enhancements to the regulatory and quality assurance framework that aims to shape the sector towards a more sustainable future. CPE will also continue to monitor activities in the sector and will not hesitate to take enforcement actions against errant operators that fail to comply with their regulatory obligations or conduct their activities in a manner that brings disrepute to the sector.
APPRECIATION
I wish to thank the CPE Board members and the five committees for their steadfast support in providing invaluable advice to guide CPE’s work. The significant contributions of the
Chairman’s Message
Regulation and Quality Assurance, Consumer Education and Student Support, Industry Development, Administration and Finance, and Audit Committee continue to serve and guide CPE in its mission. I would also like to take this opportunity to commend the CPE management and staff for their commitment and professionalism. Last but not least, I look forward to closer collaboration with industry partners and relevant stakeholders to achieve a trusted and well-regarded private education sector together.
CPE ANNUAL REPORT 2014/15
LIN CHENG TON Chairman
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CE’s
REPORT As we mark the milestone of the Council for Private Education’s (CPE) 5th anniversary in 2014, we recount our efforts to raise standards of the private education sector through our strategic thrusts of regulation and quality assurance, industry development and consumer education and support. 2014 has been a year where we continued to work towards our vision of a trusted and well-regarded private education sector.
CPE ANNUAL REPORT 2014/15
ENGAGEMENT
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Industry engagement efforts were intensified for 2014 in both frequency and substance. In the course of the last year, we met with 30 private education institutions (PEIs) through formal PEI visits, as well as more intimate one-onone dialogues with the top management of PEIs. These meaningful sessions provided us with deeper insights into how PEIs viewed the changing environment and were also valuable opportunities for feedback on areas where CPE could improve upon. We met a further 20 PEIs in smaller focus groups to better identify common areas of interests and concerns. These allowed for issues to be clarified and common perspectives to be established. At the working levels, we have also made conscious efforts to meet up with PEIs more regularly to better clarify policies and decisions. We maintained our engagement with the private education associations, namely the Singapore Association for Private Education (SAPE) and the Association of Private Schools and Colleges (APSC). The associations were able to provide feedback to us and we were able to share developing issues so that the
associations could advise their members appropriately. We hope these interactions, when taken as a whole, have made an impact and we will continue to do more where we can.
ENGAGEMENT TO ENHANCE
While the primary objective of our engagement efforts is to strengthen the relationship and understanding between CPE and the sector, we also wanted to use our engagements to identify areas for enhancement to existing administrative processes. For the former, we listened to PEIs’ feedback and continued to identify areas where we could reduce the administrative burden and compliance costs for PEIs, without compromising the interest of students. A good example of the latter approach is the way in which we conducted the review of the Annual Returns (AR) exercise. This included not only engagement with PEIs at the beginning of the review process to identify areas for improvement, but also iterative engagements, as changes
were made to seek their feedback on the revised processes and documentation. We also test-bedded the revised exercise with selected PEIs representing the different segments of the sector to get additional feedback and to make improvements before rolling out to the rest of the sector. We hope that this can be a good model to guide future efforts. We also stepped up engagement with our partners to enhance our outreach channels to prospective students. In addition to our on-going work with the Ministry of Education’s (MOE) Guidance Branch to update their career counsellors on developments in the sector, we established new links with self-help groups such as Yayasan MENDAKI, Singapore Indian Development Association (SINDA) and Chinese Development Assistance Council (CDAC) to do the same. Guided by our interactions with our partners and prospective students, we also reviewed our consumer education messages. We asked prospective students to consider “3Rs” – their Reasons for considering private education, their Readiness to
CE’s Report
ENHANCEMENT TO ENFORCE
Enforcement remains the cornerstone of CPE’s mandate as a regulatory agency. The establishment of a dedicated Monitoring and Investigation Department (MID) in the early part of 2014 sharpened our ability to detect and identify emerging issues early and as a result, allowed us to take a more sophisticated and differentiated approach to resolving them or heading them off. On one end of the scale, identifying potential issues before they materialise into actual infringements allows us to send early warnings and industry advisories to deter negative behaviour and better advise PEIs of their regulatory obligations. At the other end of the scale, once contraventions are established, we can take errant PEIs to task in a timelier manner. In this regard, we also continued to build on our partnerships with our overseas counterparts to enhance the flow of information that can aid the maintenance of standards of all stakeholders involved. We renewed our Memorandum of Understanding (MoU) in March 2015 with the Quality Assurance Agency for Higher Education (QAA) of the United Kingdom for another three years to continue to have regular strategic and operational exchanges of common interest. We
also commenced regular operational exchanges with the Tertiary Education Quality Standards Agency (TEQSA) of Australia in 2015 to share information about Australian higher education providers working with PEIs in Singapore. Our latest MoU signed with the Hong Kong Council for Accreditation of Academic and Vocational Qualifications (HKCAAVQ) will facilitate exchange on ideas to enhance quality assurance.
APPRECIATION
BRANDON LEE Chief Executive
As we look towards the next five years, CPE will continue to remain responsive to the changing private education landscape, and regularly review our policies and processes to ensure that they remain relevant. The progress made over the past five years was only made possible with the tireless commitment and efforts of our team working with the sector towards a common vision. I would also like to extend my sincere gratitude to the members of the CPE Board and committees for their guidance and support in our operations over the last year. Let us continue on our journey together to shape a trusted and wellregarded private education sector and towards our next milestone. CPE ANNUAL REPORT 2014/15
undertake further studies and their understanding of the potential Risks to their undertaking, so as to make better informed decisions.
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The
CPE BOARD 1
2
3
4
5
6
7
8
1. Mr Lin Cheng Ton Chairman Council for Private Education
CPE ANNUAL REPORT 2014/15
Chief Executive Officer Nanyang Polytechnic International
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5. Mr Alvin Tan Assistant Managing Director Human Capital, Human Resources, Information Technology and New Businesses (Contact Singapore) Economic Development Board
2. Mr Brandon Lee Chief Executive Council for Private Education
6. Prof Rajendra K. Srivastava Provost & Deputy President (Academic Affairs) Singapore Management University
3. Mr Leong Keng Thai Deputy Chief Executive & Director-General (Telecoms & Post) Infocomm Development Authority of Singapore
7. Mr Andrew Lim Partner and Co-Head Corporate Mergers and Acquisitions Allen & Gledhill
4. Mr Choe Peng Sum Chief Executive Officer Frasers Hospitality Pte Ltd
8. Senior Assistant Commissioner Anwar Abdullah Director Operations Department Singapore Civil Defence Force
The CPE BOARD
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10
11
12
13
14
15
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13. Ms Melissa Ow Deputy Chief Executive Singapore Tourism Board
10. Mr Teo Eng Cheong Chief Executive Officer International Enterprise (IE) Singapore
14. Mr Edmond Khoo Deputy Principal Temasek Polytechnic
11. Mr Khoo Chin Hean Board Member Council for Private Education
15. Mr Wan Aik Chye Chief Examiner Banking & Insurance Monetary Authority of Singapore
12. Mr John Lim Divisional Director Higher Education Ministry of Education
16. Ms Jacinta Lim Director Quality Management Policy & Corporate Development Cluster (Policy) People’s Association
CPE ANNUAL REPORT 2014/15
9. Mr Ted Tan Deputy Chief Executive SPRING Singapore
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The
MANAGEMENT
Mr Brandon Lee
Mr Remy Choo
Mr Lawrence Tan
Mr Kevin Lee
Mr Pang Tong Wee
Ms Michelle Yam
Mr Rick Ong
Mr Tong Kok Yin
Chief Executive
Chief Investigator
Director (Assessment, Registration, Monitoring and Investigation)
Chief Registrar
Deputy Director (Student Services, Consumer Education, Corporate Services and Development)
Assistant Director (Industry Development)
Deputy Director (Assessment, Registration) Chief Assessor
Assistant Director (Corporate Services and Development)
In appreciation of their contribution to the CPE management team: 1. Mr Rozlan Giri
Deputy Chief Executive May 2013 – Apr 2014
CPE ANNUAL REPORT 2014/15
2. Mr Stanley Wong
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Mr Renny Lee
Assistant Director (Policy)
Ms Koh Su Ching
Assistant Director (Corporate Communications)
Ms Khor Hwee Shin Assistant Director (Consumer Education)
Senior Legal Counsel (Legal and Prosecution) May 2012 – Mar 2015
3. Ms Nikole Lee
Assistant Director (Corporate Communications) Sep 2012 – Oct 2014
ORGANISATION Chart
BOARD CHIEF EXECUTIVE
DEPUTY CHIEF EXECUTIVE
DIRECTOR
ASSESSMENT, REGISTRATION, MONITORING & INVESTIGATION
CORPORATE COMMUNICATIONS
DEPUTY DIRECTOR
DEPUTY DIRECTOR
STUDENT SERVICES, CONSUMER EDUCATION, CORPORATE SERVICES & DEVELOPMENT
ASSESSMENT, REGISTRATION
INDUSTRY DEVELOPMENT ASSESSMENT
LEGAL & PROSECUTION
REGISTRATION
MONITORING & INVESTIGATION
STUDENT SERVICES
CONSUMER EDUCATION CORPORATE SERVICES & DEVELOPMENT
CPE ANNUAL REPORT 2014/15
POLICY
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The
COMMITTEES Council for Private Education’s (CPE) Board is assisted by five Committees, which have been delegated the authority to provide guidance to the CPE management.
REGULATION AND QUALITY ASSURANCE COMMITTEE
Chaired by Mr Leong Keng Thai, the Regulation and Quality Assurance (RQA) Committee provides oversight and guidance for the regulatory functions of CPE. The Committee’s Terms of Reference are: • Exercise the approving authority for key decisions under the Enhanced Registration Framework and the EduTrust Certification Scheme as delegated by the Board; • Exercise other regulatory functions delegated by the Board; • Provide oversight on the registration and certification process; and • Provide guidance for process benchmarking and administration of the regulatory and quality assurance frameworks.
INDUSTRY DEVELOPMENT COMMITTEE
Chaired by Mr Ted Tan, the Industry Development (ID) Committee provides oversight and guidance for CPE’s industry engagement and development initiatives to raise standards and quality of the private education sector. The Committee’s Terms of Reference are:
CPE ANNUAL REPORT 2014/15
• Developing the private education sector into a trusted and well-regarded sector that is able to provide a credible pathway for educational upgrading;
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• Working in collaboration with economic agencies to facilitate and develop appropriate assistance programmes to support Private Education Institutions in: a. Manpower and capabilities development; b. Industry promotion; and c. Export of education services.
• Fostering effective industry stewardship through partnership with industry association(s) to: a. Develop industry norms and manpower competency maps; b. Share best practices through dedicated sharing platforms; and c. Facilitate process benchmarking and study missions.
CONSUMER EDUCATION AND STUDENT SUPPORT COMMITTEE
Chaired by Mr Choe Peng Sum, the Consumer Education and Student Support (CE&SS) Committee provides oversight and guidance for CPE’s consumer education initiatives and student support services. The Committee’s Terms of Reference are: a. The development and implementation of initiatives to provide timely and relevant information to consumers and to enable prospective students to make more informed choices; b. The functions of the Student Services Centre (SSC); c. The dispute resolution mechanisms for students; and d. To facilitate the placement or teaching-out of students affected by Private Education Institution closures.
The Committees
ADMINISTRATION AND FINANCE COMMITTEE
Chaired by Mr Teo Eng Cheong, the Administration and Finance (A&F) Committee provides oversight and guidance in the establishment, monitoring and effective implementation of policies relating to corporate administration, finance, human resource and information technology. The Committee’s Terms of Reference is: Exercising the approving authority as delegated by the Board.
AUDIT COMMITTEE
Chaired by Mr Khoo Chin Hean, the Audit Committee provides oversight and guidance for the internal and external audit functions of CPE. The Committee’s Terms of Reference are: • Review and endorse the Internal Audit objectives, scope of work and work plans for Board’s approval; • Review with Internal Auditors on processes and measures to provide a satisfactory and effective level of internal control and minimise any risk exposures; • Review Internal Audit reports; • Review effectiveness of the actions taken by CPE Management in response to the Internal Auditors’ recommendations; • Review the Internal Audit performance and effectiveness; • Advise the Board on all Internal Audit matters; • Review and recommend the appointment of external auditors; • Review effectiveness of actions taken by CPE Management in response to external auditor’s recommendations; and • Review the audited financial statements for Board’s approval.
CPE ANNUAL REPORT 2014/15
• Review external auditor’s audit plans and reports;
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SECTORAL STATISTICS as at 31 December 2014 A. NUMBER OF REGISTERED PRIVATE EDUCATION INSTITUTIONS (PEIs) Period of Registration
No. of PEIs (2014)
Six Years
25
Four Years
223
One Year
64
Total
312
B. NUMBER OF EDUTRUST-CERTIFIED PEIs Types of Award
No. of PEIs (2014)
EduTrust Award (Four Years)
49
EduTrust Provisional Award (One Year)
60
Total
109
C. TYPES OF COURSES OFFERED BY PEIs • In 2014, there were 2,831 active1 course offerings by PEIs. The breakdown by course levels is shown in the following pie chart. 6% Certificate 9% Postgraduate 10% Preparatory
27% Diploma
13% Others2 21% Bachelor
14% FSS
• The pie chart below shows the distribution of postsecondary courses (diploma, bachelor and postgraduate) based on fields of study. 4% Engineering Sciences
4% Education
6% Fine & Applied Arts 8% Information Technology 49% Business & Administration
CPE ANNUAL REPORT 2014/15
9% Others3
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10% Humanities & Social Sciences 10% Services
Sectoral Statistics as at 31 December 2014
D. COURSE COMMENCEMENTS
• Total new course commencements4 in 2014 were 151,704.
• Of these:
Item
2014
Singapore Citizens and Permanent Residents
48%
Part-time Students Studying in EduTrust-certified PEIs
F. PEI STAFF Item
2014
Number of teachers5
16,079
Full-time basis
36%
34%
Teachers with Bachelor’s Degree or Higher
90%
60%
Non-teaching staff
7,409
E. ENROLMENT BY TYPE OF COURSE 3% Postgraduate 29% FSS
12% Preparatory
References: 1.
A course is defined as “active” if one or more students had enrolled in it in the year of reporting.
2.
“Others” under course levels include English proficiency, Special Education and WSQ courses.
3.
“Others” under fields of study include those in Mass Communication & Information Science; Health Sciences; Architecture & Building; Law; Natural, Physical, Chemical & Mathematical Sciences.
4.
The commencement data counts a new student enrolment in a particular course at a particular PEI. A student enrolled in two different courses is counted as two enrolments. Commencement figures will show the flow of students into the PE sector in any given year.
5.
The number of teachers includes part-time teachers who may be teaching in more than one PEI.
15% Others
18% Bachelor
18% Diploma
CPE ANNUAL REPORT 2014/15
5% Certificate
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Key
MILESTONES
Official Opening of the CPE Student Services Centre by Dr Ng Eng Hen, then Minister for Education and Second Minister for Defence
Private Education Act & its subsidiary legislations were gazetted
JAN 2009
CPE ANNUAL REPORT 2014/15
Appointment of the Pro-tem Council for Private Education
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16 OCT 2009 12 MAR 2013
21 DEC 2009
Commencement of the new regulatory regime for the private education sector
22 APR 2010
CPE launches the Advertising Code for private education sector to ensure better consumer protection
20 JUN 2011
End of 18-month period for PEIs to transit to new requirements under the Private Education Act
10 APR 2012
Key Milestones
13 APR 2012
CPE and Quality Assurance Agency for Higher Education UK sign MOU to raise standards in private education
05 FEB 2013
CPE and Quality Assurance Agency for Higher Education UK renew MOU to raise standards in private education
CPE’s inaugural Private Education Conference “Raising the Bar on Quality”
28 FEB 2013
CPE and Tertiary Education Quality and Standards Agency Australia sign Memorandum of Cooperation to raise standards in private education
09 APR 2013
18 JUN 2014
25 MAR 2015
CPE and the Hong Kong Council for Accreditation of Academic and Vocational Qualifications sign MOU to raise standards in private education
CPE ANNUAL REPORT 2014/15
CPE and New Zealand Qualifications Authority sign Memorandum of Cooperation to raise standards in private education
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Regulation and
QUALITY ASSURANCE As at 31 December 2014, 312 Private Education Institutions (PEIs) were registered under the mandatory Enhanced Registration Framework (ERF). Of these, 254 or 81 per cent attained four-year registration periods or better – an increase of four per cent from 245 PEIs last year. This is an indication of PEIs being more familiar with the ERF requirements and complying with the Private Education Act and Regulations. The number of EduTrust-certified PEIs stood at 109 in 2014, compared to 114 in 2013. The number of PEIs that have earned the EduTrust award with a four-year validity period remained the same as last year at 49.
CPE ANNUAL REPORT 2014/15
“
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Council for Private Education (CPE) ensures that PEIs meet the necessary regulatory requirements before they can be registered or renewed as a registered PEI. CPE also monitors PEIs regularly to ensure that they comply with the Private Education Act.
”
ENHANCED REGISTRATION FRAMEWORK
The Enhanced Registration Framework (ERF) establishes the baseline standards in corporate governance and information transparency that a PEI must adhere to in order to operate. The validity of the registration periods ranges from one to six years, depending primarily on the PEI’s ability to meet the registration requirements. Council for Private Education (CPE) ensures that PEIs meet the necessary regulatory requirements before they can be registered or renewed as a registered PEI. CPE also monitors PEIs regularly to ensure that they comply with the Private Education Act. In Financial Year 2014/15, CPE received a total of 154 applications to register new PEIs and for the renewal of registration for existing PEIs. In addition, CPE processed 4,158 applications from registered PEIs seeking approval for new courses and
premises, as well as notifications about the deployment of teachers. During this period, a total of 17 PEIs were deregistered due to voluntary closure, cessation to offer or provide private education, unsuccessful renewal of registration or regulatory cancellation of registration.
INDUSTRY ADVISORIES
To facilitate better understanding of ERF requirements, CPE issued industry advisories to inform PEIs of common contraventions identified during registration renewal and advertisements that were contrary to best practices set out in the Advertising Code. The advisories serve to remind PEIs of the need to comply with the ERF requirements.
EDUTRUST CERTIFICATION SCHEME
The EduTrust Certification Scheme is a voluntary quality assurance scheme to differentiate PEIs with higher standards in key areas of management and provision
Regulation and Quality Assurance
In Financial Year 2014/15, CPE conducted close to 90 assessments. Eight PEIs progressed from the one-year EduTrust Provisional Award status to the four-year EduTrust Award status, while five PEIs were assessed to not have maintained the required standards upon renewal and had their status changed from the four-year EduTrust Award status to the one-year EduTrust Provisional Award status. Another four PEIs allowed their certification to lapse due to changes in business plan and/or their inability to meet all the EduTrust prerequisites to apply for the renewal.
STREAMLINING THE ANNUAL RETURNS EXERCISE
CPE has been conducting the Annual Returns Exercise since 2011 as part of the mandatory annual returns reporting by PEIs under the Private Education Act. Each PEI has to report its activities and affairs to CPE at the end of each calendar year. The exercise facilitates the collection of data to track the development of the sector and to guide policy decisions.
As part of CPE’s continued efforts to cut red tape and streamline reporting requirements, CPE did a major revamp of the CPE Annual Returns Exercise in 2014, after seeking feedback from the industry and undertaking a thorough review of our internal processes. CPE consulted PEIs to solicit inputs for a new simplified e-Form and made refinements to it based on the feedback received, as well as invited them to participate in a User Acceptance Test. The enhanced Annual Returns Exercise served to reduce the administrative burden on PEIs while ensuring greater data availability for a more detailed analysis of the data to guide policy decisions. The sector’s response to the streamlining of the CPE Annual Returns Exercise was positive. CPE will continue to improve the reporting structure and processes as well as seek feedback, support and cooperation of PEIs to ensure a seamless procedure for all the parties involved in forthcoming exercises.
“
As part of CPE’s continued efforts to cut red tape and streamline reporting requirements, CPE did a major revamp of the CPE Annual Returns Exercise in 2014, after seeking feedback from the industry and undertaking a thorough review of our internal processes.
”
ENFORCEMENT ACTION
On 9 May 2014, CPE issued a stern warning in lieu of prosecution to Spring College International (SCI) for publishing an advertisement with false or misleading statements. Financial Year 2014/15 also saw CPE issuing stern warnings in lieu of prosecution to the Managers of five PEIs. These Managers had failed to obtain CPE’s permission before making changes to their registered premises.
CPE ANNUAL REPORT 2014/15
of educational services. These PEIs have put in place systems and processes to ensure higher standards of service for their students. The period of certification of either one or four years depends on the outcome of the assessment, with better performers placed on a four-year certification period.
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Regulation and Quality Assurance
CPE ANNUAL REPORT 2014/15
INTERNATIONAL ENGAGEMENTS
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In the past year, CPE continued to forge collaborations with its overseas regulatory counterparts to strengthen regulatory linkages and share best practices for regulation of institutions and courses. CPE entered into a new Memorandum of Understanding (MoU) with the Hong Kong Council for Accreditation of Academic and Vocational Qualifications (HKCAAVQ) on 18 June 2014. It was witnessed by Consul General Jacky Foo, from the Singapore Consulate General, together with representatives from the Hong Kong Education Bureau and Council Members of the HKCAAVQ. With the aim of enhancing quality assurance to improve the quality of higher education in Hong Kong and private education in Singapore, the MoU with HKCAAVQ paves the way for a closer working relationship between the two agencies to facilitate future collaborations and sharing of best practices. As part of the official visit to Hong Kong, the CPE team met with the senior representatives from the Education Bureau and the Joint Quality Review Committee (JQRC). These meetings provided CPE with insights into the postsecondary education sector in Hong Kong and its regulation of non-local higher and professional education programmes, as well as the quality assurance and review processes for self-financed subdegree programmes offered by the eight publicly-funded degree-awarding institutions in Hong Kong.
CPE entered into a new Memorandum of Understanding with the Hong Kong Council for Accreditation of Academic and Vocational Qualifications (HKCAAVQ) on 18 June 2014.
Besides forging new overseas collaborations, CPE continued to maintain and deepen working relationships with our existing international partners. CPE renewed the MoU established with the Quality Assurance Agency for Higher Education (QAA) of the United Kingdom (UK) on 25 March 2015. This underscored a commitment to bolster our strategic alliance with a key partner that oversees the significant number of UK education providers offering their courses in Singapore. CPE has a longstanding collaboration
with the QAA, where both agencies exchange regular updates on significant developments in the quality assurance of education providers within our respective jurisdictions, through video conferences. CPE also continued to maintain close ties with the Tertiary Education Quality and Standards Agency (TEQSA), Australia’s independent national regulator of the higher education sector. Apart from holding an inaugural operational video conference with TEQSA in January
Regulation and Quality Assurance
Additionally, CPE actively participated in other regional conferences to establish working relationships with the relevant authorities of our neighbouring countries. At the invitation of the United Nations Educational, Scientific and Cultural Organisation (UNESCO), CPE’s Chief Executive attended a higher education workshop held in Myanmar from 26 to 27 May 2014, which was co-organised by the Myanmar Ministry of Education and UNESCO, where he explained the regulatory framework
for PEIs in Singapore. The workshop, “Institutional Autonomy, Funding, Quality Assurance & Private Higher Education: Best Practices from ASEAN and Beyond”, provided guidance on education reforms for the private higher education sector in Myanmar. It convened senior management representatives from quality assurance agencies and academic institutions in the region, who shed light on their experiences in the quality assurance of private higher education providers. In addition, CPE took part in the Australian International Education Conference (AIEC) held in Brisbane from 7 to 10 October 2014. At the invitation
CPE’s Chief Executive, Mr Brandon Lee (front row, 7th from left) attended a higher education workshop held in Myanmar, which was co-organised by the Myanmar Ministry of Education and UNESCO.
of TEQSA, CPE’s Chief Executive participated in a panel discussion entitled “Off-shore Course Provision Accreditation and Quality Assurance”, where he highlighted the challenges of maintaining the chain of quality assurance across national boundaries. In addition, a CPE team attended the Asia-Europe Meeting (ASEM) Dialogue on Quality Assurance and Recognition from 25 to 26 August 2014, which was organised by the Malaysian Qualifications Agency (MQA). Current policies on quality assurance in education were discussed at this meeting.
CPE ANNUAL REPORT 2014/15
2015 to exchange regulatory updates and developments, the leaders of both agencies also had the opportunity to meet for strategic discussions.
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Regulation and Quality Assurance
CPE ANNUAL REPORT 2014/15
CPE hosted two officers (3rd and 4th from right) from the Ministry of Education, Brunei Darusalam, for a weeklong attachment.
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In September 2014, CPE hosted two officers from the Ministry of Education (Private Education Section), Brunei Darussalam for a week-long attachment from 1 to 5 September 2014, which provided an overview of the regulatory and quality assurance framework for PEIs in Singapore. The CPE also hosted the secretariat for the Tuition Protection Services (TPS), Australia for a one-week visit from 12 to 16 January 2015 to understand the fee protection measures which CPE has put in place for the PE sector. These officers were given an overview of the regulatory and quality assurance framework for PEIs in Singapore. This helped provide some points of reference on how some of the measures
employed by CPE could potentially be adapted in their home countries. As part of our commitment to enhance bilateral exchanges with the overseas regulators, CPE sent an officer for a oneweek job placement from 29 September to 3 October 2014) with TEQSA. The officer gained a deeper understanding of the regulatory system of the higher education sector in Australia. These exchanges will further strengthen CPE’s relations with our international counterparts.
Consumer Education and
STUDENT SERVICES
CPE continued in its efforts to raise standards in the private education sector through effective consumer education and student support initiatives.
OUTREACH EFFORTS
In Financial Year 2014/15, CPE participated in a total of 11 education and career fairs and talks to reach out to prospective students from local postsecondary education institutions, such as polytechnics and Institute of Technical Education. CPE also reached out to national servicemen from the Singapore Armed Forces and the Home Team, which included the Singapore Police Force and the Singapore Civil Defence Force. Together with consumer education information published in educational supplements in newspapers such as The Straits Times, My Paper and The New Paper, CPE reached out to over 30,000 prospective students.
CPE engaged prospective students from local post-secondary education institutions, as well as national servicemen and the Home Team.
and PEIs were also shared with the school counsellors, so that they could better guide students who approach them for advice on tertiary educational pathways.
CPE participated in a total of 11 education and career fairs and talks to reach out to prospective students.
CPE ANNUAL REPORT 2014/15
In September 2014, CPE collaborated with the Guidance Branch of the Ministry of Education’s Student Development Curriculum Division to organise talks for over 100 Education and Career Guidance coordinators, as well as school counsellors from secondary schools and post-secondary education institutions. Participants learnt more about the private education sector, CPE’s regulatory role and schemes, as well as frequently asked questions and concerns of prospective and current students of Private Education Institutions (PEIs). Common misconceptions that prospective students held about publicly-funded institutions
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Consumer Education and Student Services
CPE ANNUAL REPORT 2014/15
The comic strip - ‘Five Tips before You Decide on Private Education’
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Additionally, CPE developed its first infographic and comic strip with tips on what to look out for before deciding on private education in November 2014 and January 2015 respectively. The tips aimed to reach out to young prospective students of private education to help
them deliberate their options before they committed to private education. Soft copies of the infographic and comic strip were distributed to counsellors in secondary schools, junior colleges and centralised institutes during the national examination (‘O’, ’N’ and ‘A’ Levels) results
release periods, with the assistance of MOE’s Guidance Branch. The infographic and comic strip were subsequently uploaded onto the CPE website.
Consumer Education and Student Services
CPE continued to develop partnerships with other agencies and organisations, as part of consumer education efforts. For instance, the Singapore Workforce Development Agency (WDA) and CPE will collaborate to align some of our consumer education messages, in light of SkillsFuture initiatives. CPE reached out to self-help groups such as the Chinese Development Assistance Council (CDAC), the Singapore Indian Development Association (SINDA) and Yayasan MENDAKI to help them understand the private education sector so that they in turn can assist students and parents who may be interested in private education, and refer them to CPE for further assistance. In January 2015, a new editorial section ‘Key Facts You Might Not Know’ was published on the CPE website. The first editorial was on the topic of university rankings and it highlighted key facts which students should be aware of, and the different views on university rankings.
STUDENT SERVICES
In Financial Year 2014/15, CPE handled approximately 3,150 cases. This reflected a 10 per cent decrease from the total number of cases received in 2013. Majority of cases for Financial Year 2014/15 were brought to CPE’s attention
through parents, relatives, friends of students, as well as members of public. Approximately 20 per cent of these cases were complaints while the rest were enquiries, similar to the case in 2013. Profile of Individuals Who Filed Cases 65% Parents, relatives, friends of students and members of the public
Nature of Cases 77% Enquiries
6% PEIs 29% Students
were not successfully mediated, and 33 per cent of these were escalated to arbitration. Half of these escalated cases were awarded in favour of students at the arbitration stage. In Financial Year 2014/15, CPE referred 26 disputes to SMC, an increase of approximately 40 per cent over that in 2013. Out of these, approximately 60 per cent were disputes over fees, and the rest were disputes over administrative (30%) and academic processes of PEIs (10%). In the same year, two cases were escalated to arbitration, as students were unable to reach a mutual settlement during the mediation stage.
1% Suggestions and Compliments 22% Complaints
CPE MEDIATION-ARBITRATION SCHEME
Since the launch of the CPE MeditationArbitration Scheme in May 2010, 93 cases have been referred to our partner, Singapore Mediation Centre (SMC). Approximately one-third of these cases
CPE ANNUAL REPORT 2014/15
DEVELOPMENT OF NEW CHANNELS AND INFORMATION
23
Industry
DEVELOPMENT CPE continued to facilitate the strategic development of the private education sector by working closely with industry stakeholders and partners in our industry development efforts to improve the capabilities of PEIs.
“
Since 2013, CPE has put in place various industry communications platforms for PEIs to share good practices.
”
CAPABILITY DEVELOPMENT INITIATIVES
Underlying the industry development thrust is the need to help Private Education Institutions (PEIs) build their capabilities, so that they can better support their students. Capability development initiatives which were implemented in 2012 - Republic Polytechnic’s Specialist Diploma in Applied Learning and Teaching (SDALT), and IDA’s Software-as-a-Service (SaaS) Call-for-Collaboration (CFC) programme for School Management Systems - have seen healthy take-up rates from the sector over the past few years.
CPE ANNUAL REPORT 2014/15
Since 2012, over 220 educators have enrolled in the SDALT, a teacher training programme designed to enhance the pedagogy and instructional skills of teachers in the private education sector. Republic Polytechnic has successfully conducted eight intakes of the SDALT and will continue to run two intakes annually, over the next three years.
24
CPE facilitated the sector’s participation in IDA’s SaaS CFC programme for School Management Systems in 2012, and has been encouraging PEIs to adopt School Management Systems in order
to streamline administration processes, achieve productivity gains, and enhance the learning experience of students. More than 60 PEIs have adopted School Management Systems since the launch of the CPE-IDA industry initiative. Since January 2015, School Management Systems have been included in the list of pre-qualified iSPRINT packaged solutions under IDA’s Enhanced iSPRINT (Sector Scale Up) scheme. Under this scheme, eligible SMEs will enjoy a 70 per cent subsidy and pay only 30 per cent upfront to vendors. IDA will reimburse the 70 per cent support directly to vendors. CPE will continue to encourage PEIs that have not adopted School Management Systems to capitalise on this cost-effective opportunity to achieve productivity gains.
PARTNERING THE INDUSTRY
To better support its regulatory work, CPE engages our industry stakeholders regularly through dialogues and industry communications platforms. Since 2013, CPE has put in place various industry communications platforms for PEIs to share good practices. In 2014, we continued to leverage e-newsletters, e-bulletins and industry seminars, to entrench the quality imperative in
Industry Development
CPE has continued its practice of engaging PEIs on a regular basis to build ties with the industry and discuss industry needs and challenges. Over the past year, CPE made significant one-toone engagements (at the Chief Executive level and above) with 30 PEIs as part of our wider industry engagement efforts. These have continued to result in many meaningful exchanges. In addition, the Chief Executive engaged with 20 PEIs via four focus group discussions which were conducted to gather feedback on the needs and interests of different types of PEIs, namely PEIs with industry affiliations, PEIs which serve specific industry needs, foreign system schools and business owners of PEIs. Regular dialogues were held with the private education sector’s two industry associations - Singapore Association for Private Education (SAPE) and the Association of Private Schools and Colleges (APSC) to synergise efforts in improving the quality of the sector, as well as communicate issues or challenges faced by different segments of the sector. Additionally,
CPE supports industry associations on promoting good practices in the sector. For instance, CPE supported SAPE in organising an industry seminar in May 2014, to share strategies on remaining relevant in the sector. The seminar was attended by 316 participants from 108 PEIs. Drawing lessons from insightful sharing sessions by practitioners from the National Institute of Education, Singapore Management University, Institute for Adult Learning, and Nanyang Technological University, seminar participants were encouraged to adapt these useful ideas for implementation within their institutions.
“
CPE has continued its practice of engaging PEIs on a regular basis to build ties with the industry and discuss industry needs and challenges.
”
Moving forward, CPE will continue in its efforts to drive capability development to raise the baseline standards of the private education sector.
CPE ANNUAL REPORT 2014/15
PEIs, influence PEI behaviour as well as improve PEIs’ understanding of regulatory requirements. Through these platforms, CPE ensures that PEIs are kept updated on the best practices in education, on topics such as teacher training, student support and quality assurance.
25
Our
ORGANISATION CPE continued to enhance the careers of staff members through professional development and by building a choice place to work through policies and practices that promote team effort and work-life harmony.
CPE staff members enjoyed a visit to the Changi NEWater plant.
CPE ANNUAL REPORT 2014/15
STAFF ENGAGEMENT
26
In addition to existing staff engagement platforms, various HR communication initiatives were introduced to reach out to staff members. HR Chat sessions aimed to help CPE staff establish a better understanding of key HR policies, whilst HR Connect sessions brought HR closer to staff to appreciate issues close to their hearts. Exemplifying CPE’s commitment to support good work-life harmony, Family-Life Education Talks were also organised to empower staff with skills and knowledge to build a strong and happy family.
The CPE Annual Staff Conference was held on 20 June 2014, in conjunction with the Public Service Week Observance Ceremony. The Chief Executive briefed staff members on the state of the private education sector and staff members took part in a photography session, where both formal portraits and fun group shots were taken. CPE staff recited the Public Service Pledge as well, reaffirming their commitment to serve the nation and its people. In the past year, the Staff Welfare Committee (SWC) organised various
Staff members had fun taking group shots at the CPE Annual Staff Conference.
Our Organisation
To contribute towards CPE’s corporate social responsibility efforts, the SWC organised a Hari Raya charity event in collaboration with Beyond Social Services in July 2014, where CPE staff contributed and distributed cash, food items and goodie bags to low-income households in the Lengkok Bahru community. It was indeed a heartwarming event, where CPE staff received smiles and greetings from the residents.
Staff members preparing the goodie bags for distribution at the Hari Raya charity event.
CPE’s Chief Executive, Mr Brandon Lee (right) blowing out the candles on CPE’s 5th Anniversary cake.
Staff members gathered for CPE’s 5th Anniversary celebration that was held on 22 January 2015.
CPE ANNUAL REPORT 2014/15
activities to promote staff well-being and bonding. These included “ENLIVEN!” in May 2014, where staff got together to decorate the workplace, a learning journey to the Changi NEWater plant in August 2014, a cycling cum “treasure hunt” event at Pasir Ris Park in September 2014, as well as celebrations for major festivals such as Hari Raya, Deepavali and Chinese New Year. The activities culminated with CPE’s 5th Anniversary celebration held on 22 January 2015, which was themed “Celebrating Our Memories and Aspirations”, where staff members reflected on CPE’s formative years, the milestones attained and hopes and aspirations for CPE in the coming years.
27
Our Organisation
STAFF DEVELOPMENT
CPE values its staff and believes that every officer has talent and ability that should be developed to its fullest. The CPE Training Plan aims to build a culture of continuous learning that spurs our officers to improve their skills, knowledge and capabilities, assuring lifelong employability for every individual. Ultimately, training nurtures a commitment to excellence and improves the quality of our service to the public. It helps build a capable, innovative and forward-looking Public Service that can create the conditions necessary for a successful and vibrant Singapore. Departments have also initiated their own learning platforms such as regular sharing sessions within the department to understand how to deal with customers, as well as organisation-wide ones sharing how EduTrust assessments are conducted.
CPE ANNUAL REPORT 2014/15
REWARD AND RECOGNITION
28
To reinforce the culture of CPE (Proactive, Respect, Open and Supportive), the SPOT Awards was instituted in Financial Year 2013/14 to recognise staff who demonstrated elements of our desired culture. For the very first time, the award was awarded to a project team. The Annual Returns Project Team consisted of members from different departments with various skillsets such as data analysis, industry development and
information technology. The team was tasked to review the data collection and provided analysis on private education sector statistics. The team also looked into reducing the administrative burden on Private Education Institutions, as well as streamlining processes to generate the statistics more efficiently internally. The project leveraged the different strengths of its members and through it, they demonstrated proactivity in engaging sector stakeholders and displayed good collaboration across departments. Their contribution had enabled CPE to gain critical insight into the sector.
RISK MANAGEMENT
With the assistance of risk management consultants, CPE completed its Enterprise Risk Management exercise during the financial year. The exercise gave CPE greater insight into its key risk exposures, which would affect its mission, goals and strategies in the regulation of the private education industry. With a clearer understanding of its internal controls, a formalised risk management framework, as well as a better appreciation of risk management among the staff, CPE is now able to make more informed decisions in the furtherance of its mission and objectives.
WHISTLEBLOWING POLICY
To reinforce the value of good corporate governance and transparency, CPE has put in place a whistleblowing policy to
enable all individuals to voice concerns in a responsible and effective manner, should they discover information that may suggest malpractice without fear of reprisal. All whistleblowing disclosures will be treated as confidential and concerns can be raised in writing to the Chief Executive or the Chairman of the Audit Committee.
FINANCIAL STATEMENTS
for the year ended 31 March 2015
THE CONTENTS 30 31 32 34 35
Council Information
36 37 39
Statement of Changes in Equity
Statement by Board Members Independent Auditor’s Report Statement of Financial Position Statement of Comprehensive Income and Expenditure
Statement of Cash Flows Notes to the Financial Statements
Council
INFORMATION Council registration number Registered office Board members
Principal banker
CPE ANNUAL REPORT 2014/15
Independent auditor
30
UEN: T09GB0001A 2 Bukit Merah Central #05-00 Singapore 159835 Lin Cheng Ton Brandon Lee Leong Keng Thai Choe Peng Sum Ted Tan Teo Eng Cheong Khoo Chin Hean John Lim Alvin Tan Prof Rajendra K. Srivastava Andrew Lim Senior Assistant Commissioner Anwar Abdullah Melissa Ow Edmond Khoo Wan Aik Chye Jacinta Lim DBS Bank Limited 2 Changi Business Park Crescent Singapore 486029 Foo Kon Tan LLP (formerly known as Foo Kon Tan Grant Thornton LLP) Public Accountants and Chartered Accountants 47 Hill Street #05-01 Singapore Chinese Chamber of Commerce & Industry Building Singapore 179365
STATEMENT BY BOARD MEMBERS for the financial year ended 31 March 2015 In our opinion, i.
the accompanying financial statements of the Council for Private Education (the “Council�) as set out on pages 34 to 57 are properly drawn up in accordance with the provisions of the Private Education Act (Chapter 247A) and Statutory Board Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Council as at 31 March 2015 and of the results, changes in equity and cash flows of the Council for the year ended on that date;
ii.
at the date of this statement, there are reasonable grounds to believe that the Council will be able to pay its debts as and when they fall due; and
iii. the receipts, expenditure, and investment of moneys and acquisition and disposal of assets by the Council during the financial year have been in accordance with the provisions of the Act. The Board has, on the date of this statement, authorised these financial statements for issue.
On behalf of the Board
................................................................... BRANDON LEE Chief Executive 9 June 2015
CPE ANNUAL REPORT 2014/15
................................................................... LIN CHENG TON Chairman
31
INDEPENDENT AUDITOR’S REPORT
to the members of Council for Private Education REPORT ON THE FINANCIAL STATEMENTS
We have audited the accompanying financial statements of Council for Private Education (the “Council”) set out on pages 34 to 57, which comprise the statement of financial position as at 31 March 2015, statement of comprehensive income and expenditure, statement of changes in equity and statement of cash flows of the Council for the financial year then ended, and a summary of significant accounting policies and other explanatory information. The financial statements for the financial year ended 31 March 2014 were audited by another firm of certified public accountants whose report dated 24 June 2014 expressed an unqualified opinion on those financial statements.
Management’s Responsibility for the Financial Statements
The Council’s management is responsible for the preparation and fair presentation of these financial statements in accordance with the provisions of the Private Education Act (Chapter 247A) (the “Act”) and Statutory Board Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Council’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
CPE ANNUAL REPORT 2014/15
Opinion
32
In our opinion, the financial statements are properly drawn up in accordance with the provisions of the Act and Statutory Board Financial Reporting Standards so as to present fairly, in all material respects, the state of affairs of the Council as at 31 March 2015 and the results, changes in equity and cash flows of the Council for the year then ended on that date.
Independent Auditor’s Report to the members of Council for Private Education (Cont’d)
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
Management’s Responsibility for Compliance with Legal and Regulatory Requirements
The Council’s management is responsible for ensuring that the receipts, expenditure, investment of moneys and the acquisition and disposal of assets, are in accordance with the provisions of the Act. This responsibility includes implementing accounting and internal controls as management determines are necessary to enable compliance with the provisions of the Act.
Auditor’s Responsibility
Our responsibility is to express an opinion on management’s compliance based on our audit of the financial statements. We conducted our audit in accordance with Singapore Standards on Auditing. We planned and performed the compliance audit to obtain reasonable assurance about whether the receipts, expenditure, investment of moneys and the acquisition and disposal of assets, are in accordance with the provisions of the Act. Our compliance audit includes obtaining an understanding of the internal control relevant to the receipts, expenditure, investment of moneys and the acquisition and disposal of assets; and assessing the risks of material misstatement of the financial statements from non-compliance, if any, but not for the purpose of expressing an opinion on the effectiveness of the Council’s internal control. Because of the inherent limitations in any accounting and internal control system, non-compliances may nevertheless occur and not be detected. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on management’s compliance.
Opinion a.
the receipts, expenditure, investment of moneys and the acquisition and disposal of assets by the Council during the year are, in all material respects, in accordance with the provisions of the Act; and
b.
proper accounting and other records have been kept, including records of all assets of the Council whether purchased, donated or otherwise.
FOO KON TAN LLP Public Accountants and Chartered Accountants Singapore, 9 June 2015
CPE ANNUAL REPORT 2014/15
In our opinion:
33
STATEMENT OF FINANCIAL POSITION as at 31 March 2015
Note ASSETS Non-Current Plant and equipment Intangible assets Current Trade and other receivables Deposits Prepayments Cash and cash equivalents
CPE ANNUAL REPORT 2014/15
Liabilities Current Trade and other payables Deferred income Deferred capital grant Provision for contribution to consolidated fund
34
Non-Current Deferred income Deferred capital grant Provision for reinstatement cost Total equity and liabilities
31 March 2014 $
1 April 2013 $
(Restated)
(Restated)
3 4
363,923 1,749 365,672
389,957 81,460 471,417
461,753 189,573 651,326
5
21,609 55,248 72,441 7,002,293 7,151,591 7,517,263
6,333 123,420 174,440 6,057,199 6,361,392 6,832,809
2,825 123,420 101,719 5,171,844 5,399,808 6,051,134
7
4,145,119 2,318,171 6,463,290
3,745,119 1,823,937 5,569,056
3,745,119 1,152,775 4,897,894
8 9 10
769,672 83,550 5,916 101,229 960,367
966,181 83,400 7,322 171,127 1,228,030
1,025,978 82,317 12,867 1,121,162
9 10
14,416 8,874 70,316 93,606 7,517,263
20,933 14,790 35,723 6,832,809
9,966 22,112 32,078 6,051,134
6
Total assets EQUITY AND LIABILITIES Capital and Reserves Capital account Accumulated surplus Total equity
31 March 2015 $
The annexed notes form an integral part of and should be read in conjunction with these financial statements.
STATEMENT OF COMPREHENSIVE INCOME AND EXPENDITURE Year ended
Year ended
31 March 2015
31 March 2014
$
$
448,020 168,323 128,884 2,000 80,280 827,507
358,090 177,127 119,817 75,500 60,984 791,518
(7,153,420) (161,557) (83,211) (1,078,673) (29,187) (278,989) (37,130) (87,511) (65,900) (744,632) (495,737) (579,845) (10,795,792)
(7,063,003) (117,532) (135,113) (867,321) (29,029) (320,836) (21,350) (63,492) (83,522) (774,251) (579,936) (1,126,492) (11,181,877)
(9,968,285)
(10,390,359)
Note Income Application fees Certification fees Annual fees Fines and penalties Others Operating expenditure Expenditure on manpower Depreciation of plant and equipment Amortisation of intangible assets Rental of premises and others Utilities Repairs and maintenance Publications and advertising expenses Staff welfare and development Transport, postage and communications Contract services Legal and other professional fees Other operating expenses
11 3 4
Deficit before grants Grants Operating grants received from Government Amortisation of deferred capital grants
10
10,556,426 7,322 10,563,748
11,384,121 12,867 11,396,988
Surplus for the year before statutory contribution to consolidated fund
11
595,463
1,006,629
12
(101,229)
(335,467)
494,234
671,162
Statutory contribution to consolidated fund Net surplus for the year, representing Total comprehensive income for the year
The annexed notes form an integral part of and should be read in conjunction with these financial statements.
CPE ANNUAL REPORT 2014/15
for the financial year ended 31 March 2015
35
STATEMENT OF CHANGES IN EQUITY for the financial year ended 31 March 2015 Share capital Note As at 1 April 2013 as previously stated Prior year’s adjustment
17
As at 1 April 2013, as restated Total comprehensive income for the year As at 31 March 2014 Capital injection Total comprehensive income for the year
CPE ANNUAL REPORT 2014/15
Balance at 31 March 2015
36
7
Accumulated surplus
Total
$
$
$
3,740,279
1,157,615
4,897,894
4,840
(4,840)
-
3,745,119
1,152,775
4,897,894
-
671,162
671,162
3,745,119
1,823,937
5,569,056
400,000
-
400,000
-
494,234
494,234
4,145,119
2,318,171
6,463,290
The annexed notes form an integral part of and should be read in conjunction with these financial statements.
STATEMENT OF CASH FLOWS
for the financial year ended 31 March 2015 Year ended 31 March 2015
Year ended 31 March 2014
$
$
(9,968,285)
(10,390,359)
161,557 83,211 (46,908) (32,104)
117,532 135,113 (7,649)
8,642 2,013 (9,791,874) 168,249 (196,509) (6,367) (9,826,501) (171,127) 18,750 (9,978,878)
263,273 3,155 (9,878,935) (76,229) (59,797) 12,050 (10,002,911) (164,340) 7,649 (10,159,602)
(b) 11 4
(20,312) (8,642) (3,500) (32,454)
(48,891) (263,273) (27,000) (339,164)
7
400,000 10,556,426 10,956,426
11,384,121 11,384,121
945,094 6,057,199 7,002,293
885,355 5,171,844 6,057,199
Note Cash Flows from Operating Activities Deficit before grants and statutory contribution to consolidated fund
Cash Flows from Investing Activities Purchase of plant and equipment Plant and equipment expensed off Purchase of intangible assets Net cash used in investing activities Cash Flows from Financing Activities Issuance of shares Government grant received Net cash generated from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year
3 4 (a) 11
12
6
The annexed notes form an integral part of and should be read in conjunction with these financial statements.
CPE ANNUAL REPORT 2014/15
Adjustments for: Depreciation of plant and equipment Amortisation of intangible assets Income received from assets transferred Interest income Plant and equipment - expensed off - written off, net Operating deficit before working capital changes Decrease/(Increase) in trade and other receivables, deposits and prepayments Decrease in trade and other payables (Decrease)/Increase in deferred income Cash used in operations Contribution paid to consolidated fund Interest received Net cash used in operating activities
37
Statement of cash flows (Cont’d) for the financial year ended 31 March 2015
Notes to the statement of cash flows:
CPE ANNUAL REPORT 2014/15
Plant and equipment
38
a.
During the year, the Council has acquired office equipment at a cost of $46,908 which was paid by the Government and transferred to the Council under Whole-of-Government Information and Communciations Technology infrastructure arrangement. These additions are borne by the Government as part of the transition out of the Standard Operating Environment program and have been recognised as other income in the statement of comprehensive income and expenditure.
b.
Purchase of plant and equipment excludes provision for reinstatement costs of $70,316 (2014 - $Nil) which will be incurred upon expiration of the office leases as disclosed in Note 3 to the financial statements.
NOTES TO THE FINANCIAL STATEMENTS for the financial year ended 31 March 2015 1
GENERAL INFORMATION
The Council for Private Education (the “Council”) was established on 1 December 2009 under the Private Education Act (Chapter 247A). Its registered office is at 2 Bukit Merah Central, #05-00, Singapore 159835 and its principal place of business is in Singapore. The Council is subjected to the control of its supervisory ministry, Ministry of Education (“MOE”) and is required to follow the policies and instructions issued from time to time by MOE and other government ministries and departments such as the Ministry of Finance (“MOF”). The principal activities of the Council are: to assess private education institutions for registration and EduTrust certification; and
b.
to promote the development of the private education industry.
BASIS OF PREPARATION
The financial statements have been prepared in accordance with the provisions of the Private Education Act (Chapter 247A) (the “Act”) and Statutory Board Financial Reporting Standards (“SB-FRS”). The financial statements have been prepared under the historical cost convention, except as disclosed in the accounting policies below.
Significant accounting estimates and judgements
The preparation of financial statements in conformity with SB-FRS requires management to exercise its judgement in the process of applying the Council’s accounting policies. It also requires the use of certain accounting estimates and assumptions. The critical accounting estimates and assumptions used and area involving a high degree of judgement are described below:
Depreciation of plant and equipment Plant and equipment are depreciated on a straight-line basis over their estimated useful lives. The Council estimate the useful lives of plant and equipment to be within 5 to 10 years. The carrying amount of the Council’s plant and equipment as at 31 March 2015 is $363,923 (2014 - $389,957). Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised.
Provision for site restoration A provision is made for the present value of anticipated costs for future restoration of leased office premises. The provision includes future cost estimates associated with closure of the leased premises. The calculation of this provision requires assumptions such as application of closure dates and cost estimates.
CPE ANNUAL REPORT 2014/15
2(A)
a.
39
Notes to the Financial Statements
2(A)
BASIS OF PREPARATION (CONT’D)
Significant accounting estimates and judgements (Cont’d) Provision for site restoration (Cont’d) The provision recognised is periodically reviewed and updated based on the facts and circumstances available at the time. Changes to the estimated future costs are recognised in the statement of financial position by adjusting the expenses or asset, if applicable, and provision. As at 31 March 2015, management recognised a provision for site restoration amounting to $70,316 (2014: $NIL).
2(B)
INTERPRETATIONS AND AMENDMENTS TO PUBLISHED STANDARDS EFFECTIVE IN 2014
On 1 April 2014, the Council adopted the new or amended SB-FRS and Interpretations to SB-FRS (“INT SB-FRS”) that are mandatory for application from that date. Changes to the Council’s accounting policies have been made as required in accordance with the relevant transitional provisions in the respective SB-FRS and SB-INT FRS. The adoption of these new or amended SB-FRS and INT SB-FRS did not result in substantial changes to the Council’s accounting policies and had no material effect on the amounts reported for the current or prior financial years.
2(C)
SB-FRS NOT YET EFFECTIVE
The following are the new or amended SB-FRS and INT-FRS issued in 2014 that are not effective but may be early adopted for the current financial year:
Reference
Description
Improvements to SB-FRS 24 (2014)
Key management personnel
Effective date (Annual periods beginning on or after) 01.07.2014
CPE ANNUAL REPORT 2014/15
Improvements to FRSs (January 2014) Related Party Disclosures clarify that an entity providing key management personnel services to the reporting entity or to the parent of the reporting entity is a related party of the reporting entity. In addition, an entity that uses a management entity is required to disclose the expenses incurred for the management services. The improvements to FRSs (January 2014) FRS 24-Related Party Disclosures are effective from annual periods beginning on or after 1 July 2014. As it is a disclosure standard, it will not have any impact on the financial performance or the financial position of the Council when implemented.
40
Other than the above, the Council do not anticipate that the adoption of the above SB-FRS in future periods will have a material impact on the financial statements of the Council in the period of their initial adoption.
Notes to the Financial Statements
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Plant and equipment and depreciation
Plant and equipment are initially recorded at cost. Subsequent to initial recognition, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation of an asset begins when it is available for use and is computed using the straight-line method to allocate their depreciable amount over their estimated useful lives as follows. Renovation
Shorter of remaining lease term or 3 years
Furniture and fittings
8 to 10 years
Office equipment and computers
5 years
The cost of plant and equipment includes expenditure that is directly attributable to the acquisition of the items. The cost of dismantling and removing the items and restoring the site are included as part of the cost of plant and equipment if the obligation for dismantlement, removal or restoration is incurred as a consequence of acquiring or using the asset. Subsequent expenditure relating to plant and equipment that has already been recognised is added to the carrying amount of the asset only when it is probable that future economic benefits associated with the item will flow to the Council and the cost of the item can be measured reliably. All other repair and maintenance expenses are included in statement of comprehensive income and expenditure in the year the expenses are incurred. For acquisitions and disposals during the financial year, depreciation is provided from the month of acquisition and to the month before disposal respectively. Plant and equipment costing less than $2,000 each, are charged to the statement of comprehensive income and expenditure in the year of purchase as “plant and equipment written off�, which is included as part of other operating expenses. An item of plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is included in the statement of comprehensive income and expenditure in the year the asset is derecognised. Fully depreciated plant and equipment are retained in the books of accounts until they are no longer in use. Depreciation methods, useful lives and residual values are reviewed, and adjusted as appropriate, at each reporting date as a change in estimates.
CPE ANNUAL REPORT 2014/15
2(D)
41
Notes to the Financial Statements
2(D)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
Intangible assets
Intangible assets acquired, which comprise system and application development costs, are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses, if any. Amortisation of intangibles is calculated on the straight-line method to write-off the costs over their estimated useful life of 5 years. The amortisation expense on intangible assets is recognised in the comprehensive income and expenditure statement as ‘amortisation of intangible assets’. The carrying value of intangibles is reviewed for impairment when events or changes in circumstances indicate that the carrying value may be impaired. Intangible assets are written off where, in the opinion of the Council, no further future economic benefits are expected to arise.
Financial assets
Financial assets, other than hedging instruments, can be divided into the following categories: financial assets at fair value through profit or loss, held-to-maturity investments, loans and receivables and available-for-sale financial assets. Financial assets are assigned to the different categories by management on initial recognition, depending on the purpose for which the investments were acquired. The designation of financial assets is re-evaluated and classification may be changed at the reporting date with the exception that the designation of financial assets at fair value through profit or loss is not revocable. All financial assets are recognised on their trade date - the date on which the Council commits to purchase or sell the asset. Financial assets are initially recognised at fair value, plus directly attributable transaction costs except for financial assets at fair value through profit or loss, which are recognised at fair value.
CPE ANNUAL REPORT 2014/15
Derecognition of financial instruments occurs when the rights to receive cash flows from the investments expire or are transferred and substantially all of the risks and rewards of ownership have been transferred. An assessment for impairment is undertaken at least at the end of the reporting year whether or not there is objective evidence that a financial asset or a group of financial assets is impaired.
42
Non-compounding interest and other cash flows resulting from holding financial assets are recognised in the statement of comprehensive income and expenditure when received, regardless of how the related carrying amount of financial assets is measured. The Council does not have any investments and accordingly, there are no investments to be designated as financial assets at fair value through profit or loss, held-to-maturity investments or available-for-sales financial assets.
Notes to the Financial Statements
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
Financial assets (Cont’d) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Council provide money, goods or services directly to a debtor with no intention of trading the receivables. They are included in current assets, except for maturities greater than 12 months after the end of the reporting year. These are classified as non-current assets, if any. Loans and receivables are subsequently measured at amortised cost using the effective interest method, less provision for impairment, if any. Any change in their value is recognised in the statement of comprehensive income and expenditure. Any reversal shall not result in a carrying amount that exceeds what the amortised cost would have been had any impairment loss not been recognised at the date the impairment is reversed. Any reversal is recognised in the statement of comprehensive income and expenditure. Loans and receivables include trade and other receivables, deposits and cash and cash equivalents. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. If there is objective evidence that the asset has been impaired, the financial asset is measured at the present value of the estimated cash flows discounted at the original effective interest rate. Impairment losses are reversed in subsequent years when an increase in the asset’s recoverable amount can be related objectively to an event occurring after the impairment was recognised, subject to a restriction that the carrying amount of the asset at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised. The impairment or reversal is recognised in the statement of comprehensive income and expenditure.
Cash and cash equivalents
Cash and cash equivalents include cash on hand and deposits held at call with financial institutions. For purpose of presentation in the cash flow statement, cash and cash equivalents include cash at bank and deposits held with AccountantGeneral’s Department.
Financial liabilities
The Council’s financial liabilities include trade and other payables. They are included in statement of financial position item “current financial liabilities”. Financial liabilities are recognised when the Council becomes a party to the contractual agreements of the instrument. All interest related charges is recognised as an expense in “finance cost” in the statement of comprehensive income and expenditure. Financial liabilities are derecognised if the Council’s obligations specified in the contract expire or are discharged or cancelled.
CPE ANNUAL REPORT 2014/15
2(D)
43
Notes to the Financial Statements
2(D)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
Financial liabilities (Cont’d) Trade and other payables Trade payables are initially measured at fair value, and subsequently measured at amortised cost, using the effective interest method.
Provisions
Provisions are recognised when the Council have a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Present obligations arising from onerous contracts are recognised as provisions. The Council review the provisions annually and where in their opinion, the provision is inadequate or excessive, due adjustment is made. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of the time is recognised as finance costs in the statement of comprehensive income and expenditure.
Leases Operating leases Leases of assets in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Rentals on operating leases are charged to the statement of comprehensive income and expenditure on a straight-line basis over the lease term. Lease incentives, if any, are recognised as an integral part of the net consideration agreed for the use of the leased asset. Penalty payments on early termination, if any, are recognised in the statement of comprehensive income and expenditure when incurred.
CPE ANNUAL REPORT 2014/15
Employee benefits
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Pension obligations The Council contribute to the Central Provident Fund (“CPF”), a defined contribution plan regulated and managed by the Government of Singapore, which applies to the majority of the employees. The Council’s contributions to CPF are charged to statement of comprehensive income and expenditure in the year to which the contributions relate.
Notes to the Financial Statements
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
Employee benefits (Cont’d) Key management personnel Key management personnel are those persons having the authority and responsibility for planning, directing and controlling the activities of the entity. Chief Executive, Deputy Chief Executive, Directors and Deputy Directors are considered key management personnel of the Council.
Goods and services tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax except: a.
where the goods and services tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case the goods and services tax is recognised as part of the cost of acquisition of the asset or as part of the expenses item as applicable; and
b.
receivables and payables that are stated with the amount of goods and services tax included.
The net amount of goods and services tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position.
Related parties
The Council is established as a statutory board and is an entity related to the Government of Singapore. The Council’s related parties refer to Government-related entities including Ministries, Organs of State and other Statutory Boards. The Council applies the exemption in Paragraph 25 of SB-FRS 24 Related Party Disclosures, and required disclosures are limited to the following information to enable users of the Council’s financial statements to understand the effect of related party transactions on the financial statements: a.
the nature and amount of each individually significant transaction with Ministries, Organs of State and other Statutory Boards; and
b.
for other transactions with Ministries, Organs of State and other Statutory Boards that are collectively but not individually significant, a qualitative or quantitative indication of their extent.
Impairment of non-financial assets
The carrying amounts of the Council’s non-financial assets subject to impairment are reviewed at the end of the reporting year to determine whether there is any indication of impairment. If any such indication exists, the assets’ recoverable amount is estimated.
CPE ANNUAL REPORT 2014/15
2(D)
45
Notes to the Financial Statements
2(D)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
Impairment of non-financial assets (Cont’d)
If it is not possible to estimate the recoverable amount of the individual asset, then the recoverable amount of the cashgenerating unit to which the assets belong will be identified. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). As a result, some assets are tested individually for impairment and some are tested at cash-generating unit level. Individual assets or cash-generating units are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s or cash-generating unit’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of the fair value, reflecting market conditions less costs to sell and value in use, based on an internal discounted cash flow evaluation. All assets are subsequently reassessed for the indication that an impairment loss previously recognised may no longer exist. Any impairment loss is charged to the statement of comprehensive income and expenditure.
Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Council and the revenue can be reliably measured.
Application fees Application fees are recognised upon the receipts of the applications and fees.
Income from rendering of services (including certification fees) Income from rendering of services is recognised when the services have been rendered.
Annual fees Annual fees are recognised over the period which the certificate is granted.
CPE ANNUAL REPORT 2014/15
Fines and penalties
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Fines imposed on the violation of the Private Education Act (Chapter 247A) is recognised on an accrual basis.
Interest income Interest income is recognised on an accrual basis.
Notes to the Financial Statements
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
Government grants
Government grants are recognised at fair value where there is reasonable assurance that the grant will be received and all required conditions will be complied with. Government grants received by the Council to meet the current year’s operating expenses are recognised by the Council as income in the statement of comprehensive income in the year these operating expenses were incurred. Grants received in advance are recorded in the statement of financial position of the Council. Grants received from the Ministry for capital expenditure are taken to the deferred capital grants account upon the utilisation of the grants for purchase of plant and equipment and intangible assets which are written off in the year of purchase. Deferred capital grants are recognised as income over the periods necessary to match the depreciation, amortisation, writeoff and/or impairment loss of the plant and equipment and intangible assets, the balance of the related deferred capital grants is recognised as income to match the carrying amount of plant and equipment and intangible assets disposed.
Functional currencies Functional and presentation currency Items included in the financial statements of the Council are measured using the currency of the primary economic environment in which the entity operates (“functional currency”). The financial statements are presented in Singapore Dollar, which is the functional currency of the Council.
Conversion of foreign currencies Transactions and balances Transactions in a currency other than the functional currency (“foreign currency”) are translated into the functional currency using the exchange rates at the dates of the transactions. Currency translation differences from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the closing rates at the balance date are recognised in the statement of comprehensive income or expenditure. Non-monetary items measured at fair values in foreign currencies are translated using the exchange rates at the date when the fair values are determined.
CPE ANNUAL REPORT 2014/15
2(D)
47
Notes to the Financial Statements
2(D)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
Financial instruments
Financial instruments carried on the statements of financial position include financial assets and financial liabilities. The particular recognition methods adopted are disclosed in the individual policy statements associated with each item. These are recognised on the Council’s balance sheet when the Council becomes a party to the contractual provisions of the instrument. Disclosures of the Council’s financial risk management objectives and policies are provided in Note 14.
3
PLANT AND EQUIPMENT Cost At 1 April 2013 Additions Disposals At 31 March 2014 and 1 April 2014 Additions Disposals At 31 March 2015
Renovation Furniture and fittings $ $ 580,289 36,609 (5,940) 610,958 70,316* 70,316 610,958
Office equipment and computers $ 225,759 12,282 238,041 67,220# (37,279) 267,982
Total $ 806,048 48,891 (5,940) 848,999 137,536 (37,279) 949,256
Accumulated depreciation At 1 April 2013 Depreciation for the year Disposals At 31 March 2014 and 1 April 2014 Depreciation for the year Disposals At 31 March 2015
28,726 28,726
217,961 70,979 (2,785) 286,155 75,727 361,882
126,334 46,553 172,887 57,104 (35,266) 194,725
344,295 117,532 (2,785) 459,042 161,557 (35,266) 585,333
41,590 -
249,076 324,803
73,257 65,154
363,923 389,957
CPE ANNUAL REPORT 2014/15
Net book value
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At 31 March 2015 At 31 March 2014
* - refers to the reinstatement costs of the Council’s premises # - includes $46,908 of assets transferred from the Government [See Note (a) in the statement of cash flows]
Notes to the Financial Statements
4
INTANGIBLE ASSETS Cost At 1 April 2013 Additions At 31 March 2014 and 1 April 2014 Additions At 31 March 2015
System and application development costs $ 415,600 27,000 442,600 3,500 446,100
Accumulated amortisation At 1 April 2013 Amortisation for the year At 31 March 2014 and 1 April 2014 Amortisation for the year At 31 March 2015
226,027 135,113 361,140 83,211 444,351
Net book value At 31 March 2015 At 31 March 2014
TRADE AND OTHER RECEIVABLES
Trade and other receivables relate mainly to interest receivable of $19,459 (2014: $6,105).
CPE ANNUAL REPORT 2014/15
5
1,749 81,460
49
Notes to the Financial Statements
6
CASH AND CASH EQUIVALENTS
For the purpose of the cash flow statement, cash and cash equivalents comprise the following: 2015 $ 7,002,293
Cash maintained with Accountant-General’s Department (“AGD”)
2014 $ 6,057,199
Included in the cash and cash equivalents are:
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a.
an amount of $3,263,003 (2014: $3,129,938) which does not earn any interest; and
b.
the balance of $3,739,290 (2014: $2,927,261) is managed under the Centralised Liquidity Management (“CLM”) scheme as set out in the Accountant-General’s Circular’s No. 4/2009 which the Council partake in the scheme from November 2013. These are short-term deposits earning interest ranging from 0.74% to 0.99% (2014: 0.66% to 0.70%).
CAPITAL ACCOUNT 2015 Number of shares Issued and paid up Balance at beginning of year Capital injection Balance at end of year
3,745,119 400,000 4,145,119
$
3,745,119 400,000 4,145,119
2014 Number of shares
3,745,119 3,745,119
$ (Restated) 3,745,119 3,745,119
The capital account represents equity injections by the Minster for Finance, a body corporate incorporated by the Minister for Finance (Incorporation) Act (Cap. 183), in its capacity as shareholder under the debt-equity framework for statutory boards, implemented with effect from 1 September 2004. Under this framework, capital projects will be partially funded by the Minister for Finance as equity injection, and the remaining through loans or general funds of the Council.
CPE ANNUAL REPORT 2014/15
Capital management
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The Council’s objectives when managing capital is to maintain a strong capital base so as to sustain its operations and the future development of the Council. The capital structure of the Council mainly consists of capital received from its equity holder and grants from the government. There were no changes in the Board’s approach to capital management during the year. The Council is not subject to any externally imposed capital requirements.
Notes to the Financial Statements
TRADE AND OTHER PAYABLES Trade and other payables Accrued expenses
9
2015 $ 51,684 717,988 769,672
DEFERRED INCOME
Deferred income relates to certification fees and annual fees received in advance from private education institutions and the revenue is recognised in accordance with the revenue recognition policy of the Council. 2015 $ Current Non-current
10
2014 $ 51,216 914,965 966,181
83,550 14,416 97,966
2014 $ (restated) 83,400 20,933 104,333
DEFERRED CAPITAL GRANT Balance at beginning of year Less: grants taken to statement of comprehensive income and expenditure: - Amortisation of deferred capital grant Balance at end of year Current portion Non-current portion
2015 $ 22,112
2014 $ 34,979
(7,322) 14,790
(12,867) 22,112
5,916 8,874
7,322 14,790
CPE ANNUAL REPORT 2014/15
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Notes to the Financial Statements
11
SURPLUS BEFORE STATUTORY CONTRIBUTION TO CONSOLIDATED FUND
The following items have been included in arriving at surplus for the year before statutory contribution to consolidated fund:
Board members allowances Goods and Service Tax expensed off Interest income Plant and equipment: - Expensed off - Written off, net Expenditure on manpower: - Salaries and related costs - Employer’s contribution to defined contribution plan Compensation of key management personnel: - Salaries and related costs - Employer’s contribution to defined contribution plan
12
2015 $ 157,500 162,870 (32,104)
2014 $ 226,891 181,910 (7,649)
8,642 2,013
263,273 3,155
5,311,693 801,336
5,268,753 759,620
957,930 82,461 7,153,420
991,200 43,430 7,063,003
STATUTORY CONTRIBUTION TO CONSOLIDATED FUND
Under Section 13(1)(e) and the First Schedule of the Singapore Income Tax Act, Chapter 134, the income of the Council is exempt from income tax. In lieu of income tax, the Council is required to make contribution to the Consolidated Fund of the Government in accordance with the Statutory Corporations (Contributions to Consolidated Fund) Act (Chapter 319A) and in accordance with the Financial Circular Minute No M5/2005. Contribution for the financial year is determined based on 17% of net surplus for the financial year.
CPE ANNUAL REPORT 2014/15
During the financial year, management paid statutory contribution of $171,127 (2014 - $164,340) to the Consolidated Fund.
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Notes to the Financial Statements
13 COMMITMENTS a.
Operating lease commitments – as lessee The Council has entered into operating leases for rental of premises and computing equipment. The non-cancellable leases have tenure ranging from less than 1 year to 2 years. Operating lease payments recognised in the statement of comprehensive income and expenditure during the year amounted to $1,078,673 (2014 - $867,321). At the reporting date, the commitments in respect of such operating leases were as follows:
Not later than one year Later than one year and not later than five years
2014 $ 661,741 1,047,241 1,708,982
Other commitments In addition to the above, the Council has procured Infocomm Technology infrastructural support services under an agreement for Agency Facility Management (“AFM�) Services, which was entered into between the Council and a third party vendor. For the financial year ended 31 March 2015, the Council made service payments amounting to $151,063 (2014: $NIL). As at the reporting date, the commitments in respect of the above arrangement was as follows:
Agency facility management services
2015 $ 142,829 142,829
2014 $ -
CPE ANNUAL REPORT 2014/15
b.
2015 $ 641,982 481,648 1,123,630
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Notes to the Financial Statements
14
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Council have documented financial risk management policies. These policies set out the Council’s overall business strategies and its risk management philosophy. The Council is exposed to financial risks arising from its operations and the use of financial instruments. The key financial risks included foreign currency risk, interest rate risk, credit risk and liquidity risk. The Council’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise adverse effects from the unpredictability of financial markets on the Council’s financial performance. There has been no change to the Council’s exposure to these financial risks or the manner in which it manages and measures the risk. The Council do not hold or issue derivative financial instruments for trading purposes or to hedge against fluctuations, if any, in interest rates and foreign exchange.
14.1
Foreign currency risk
Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. Currency risk arises when transactions are denominated in foreign currencies. The Council do not hold cash and cash equivalents denominated in foreign currencies, hence are not exposed to any fluctuations in foreign exchange rates.
14.2
Interest rate risk
Interest rate risk refers to the risk experienced by the Council as a result of the fluctuation in interest rates. The Council’s deposits are placed with AGD, where a portion earns floating rates. At the reporting date, the Council has limited exposure to interest rate risk.
CPE ANNUAL REPORT 2014/15
14.3
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Cash flow and fair value interest rate risk
Cash flow interest rate risk is the risk that future cash flows of a financial instrument will fluctuate because of changes in the market interest rate. Fair value interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates. The Council do not hold any quoted or marketable financial instrument, hence are not exposed to any movements in market prices.
14.4
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Council. The major classes of financial assets of the Council are bank deposits and trade and other receivables.
Notes to the Financial Statements
14
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D)
14.4
14.5
Credit risk (cont’d)
As the Council do not hold any collateral, the maximum exposure to credit risk for each class of financial instruments is the carrying amount of that class of financial instruments presented on the balance sheet.
Liquidity risk
Liquidity or funding risk is the risk that an enterprise will encounter difficulty in raising funds to meet commitments associated with financial instruments. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value. The Council manage the liquidity risk by maintaining sufficient cash and marketable securities to enable them to meet their normal operating commitments, having an adequate amount of committed credit facilities granted by credit worthy financial institutions. The table below analyses non-derivative financial liabilities of the Council into relevant maturity groupings based on the remaining period from the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balance due within 12 months equal their carrying amounts as the impact of discounting is not significant.
Trade and other payables
1 to 5 years $ -
2014 1 year or less $ 966,181
1 to 5 years $ -
CAPITAL MANAGEMENT
The Council’s objectives when managing capital are: a.
to safeguard the Council’s ability to continue as a going concern; and
b.
to provide capacity to support the Council’s investments in public sector human capital, intellectual capital and technical capability development.
The Council actively and regularly reviews and manages its capital structure to ensure optimal capital structure, taking into consideration the future capital requirements, prevailing and projected profitability, projected operating cash flows, projected capital expenditures and projected investments in public sector capability development. The Council defines “capital” to include share capital and accumulated surplus.
CPE ANNUAL REPORT 2014/15
15
2015 1 year or less $ 769,672
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Notes to the Financial Statements
15
CAPITAL MANAGEMENT (CONT’D)
16
FINANCIAL INSTRUMENTS
The Council is required to comply with the Capital Management Framework for Statutory Boards detailed in Finance Circular Minute M26/2008, including the need to declare annual dividends to the Minister for Finance in return for the equity injection.
a.
Fair values The carrying amount of the financial assets and financial liabilities with a maturity of less than one year is assumed to approximate their respective fair values.
b.
Financial instruments by category The carrying amount of financial assets and financial liabilities by categories at the reporting date are as follows:
Note Financial assets Trade and other receivables Deposits Cash and bank balances
5 6
2015 Loans and receivables $
21,609 6,333 55,248 123,420 7,002,293 6,057,199 Other liabilities (carried at amortised cost)
CPE ANNUAL REPORT 2014/15
Financial liabilities Trade and other payables
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8
2014 Loans and receivables $
Other liabilities (carried at amortised cost)
769,672 966,181
Notes to the Financial Statements
PRIOR PERIOD ADJUSTMENT a.
b.
Prior period adjustments have been made to restate certain comparative amounts to correct the following errors in prior periods: i.
operating grant received from Government in excess of actual expenditure incurred amounting to $4,840 was wrongly recognised as “operating grant received from Government” in prior period; and
ii.
capital injection of $4,840 from Minister for Finance was understated in the capital account in prior period.
Certain comparative figures have been reclassified to reflect the presentation of deferred income and deferred capital grant under current and non-current liabilities. Previously reported $
Prior period adjustment $
Reclassifications $
As restated $
Statement of financial position as at 1 April 2013 Capital account Accumulated surplus Deferred income – Current Deferred income – Non-current Deferred capital grant – Current Deferred capital grant – Non-current
3,740,279 1,157,615 92,283 34,979
4,840 (4,840) -
(9,966) 9,966 12,867 (12,867)
3,745,119 1,152,775 82,317 9,966 12,867 22,112
Statement of financial position as at 31 March 2014 Capital account Accumulated surplus Deferred income – Current Deferred income – Non-current Deferred capital grant – Current Deferred capital grant – Non-current
3,740,279 1,828,777 104,333 22,112
4,840 (4,840) -
(20,933) 20,933 7,322 (7,322)
3,745,119 1,823,937 83,400 20,933 7,322 14,790
CPE ANNUAL REPORT 2014/15
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