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Chapter Law Content

Title: Private School Law CH
Category: Ministry of Education(教育部)
Chapter 4: Supervision
Article 45
Management and use of properties and funds owned by schools and school legal persons are placed under legal person or school authority’s supervision. Their funds shall not be entrusted or lent to board members, supervisors, and other individuals or non-banking institutions.
Finances, personnel and property of different schools established by a school legal person shall remain independent form each other. School legal persons having registered two or more schools concurrently or successively shall have their organization funds separately raised, deposited and used.
Expending of organization funds shall be approved by the school authority.
Article 46
Private schools’ incomes shall be used to pay for current year’s budget expenditures. The surplus shall be saved and placed in the school fund.
With the school authority’s approval, the school legal person may use half the accumulated surplus to make investments that will help improve the school’s finances, or use the money in a different school set up by the same school legal person. Rules governing use of the surplus shall be drawn up by the Ministry.
The board shall make the abovementioned investments in accordance with the law and Rules. If the school legal person incurs losses as a result of violation of the law and Rules, board members taking part in making the investment decisions shall be held liable for the losses. However, board members expressing objections which can be corroborated by records or written declarations shall not be held liable.
Article 47
Rules governing tuition and fees collected by private schools, and their use, amounts, and other issues shall be drawn up by the school authority.
Information regarding tuition and fees collected by private schools, and their use and amounts shall be made known to the public and posted on the school’s website and enrollment pamphlets.
Article 48
School legal persons may request that the school authority ask the government, state-run businesses or juridical persons to sell or lease lands they own and are needed by private schools.
If the lands’ designated purposes need to be changed, the school legal person may ask the school authority to help coordinate the change.
When the office in charge of urban planning is drafting or changing urban plans that will affect private schools’ existing lands, it shall consult the school authority or the private schools.
Article 49
Resolutions shall be carried by the board and approvals obtained from the school authority and legal person authority before immovable property can be disposed of or collateralized. The same applies to purchase or leasing of immovable property.
The following shall be observed when disposing of or collateralizing immovable property:
1. Immovable property shall be disposed of without interfering with the school’s development and operation.
2. Only lands and buildings not directly related to teaching and shelved as useless may be collateralized.
Laws governing mortgaged immovable property shall be observed.
Article 50
Private schools established by school legal persons may set up teaching-, practical training-, experiment-, research- and promotion-oriented affiliates after drawing up rules governing the affiliates and obtaining approval from the school authority and related supervisory authorities. The same applies to teaching-, practical training-, experiment-, research- and promotion-oriented undertakings in which they invest alone, or in cooperation with the government, businesses, or individuals.
Finances of the affiliates shall be separated from those of the schools. Their surpluses shall be used to employ teachers, purchase equipment and boost school fund. Unless otherwise stipulated by law or approved by the school authority, the surpluses shall not be diverted to specific individuals in any way. The property that remains when they shut down belongs to the school legal persons.
Handling of the above-said affiliates and undertakings shall not affect the schools’ normal operation. Their operation and finances shall be supervised by the school legal persons.
Article 51
An internal control system shall be set up for school legal persons and their schools to oversee them. Rules governing the system shall be drawn up by the Ministry.
Private schools founded before the Law, amended on (date), took effect shall set up an internal control system in one year after the above-said rules take effect.
Article 52
School legal persons and their schools shall set up an accounting system to handle accounting matters. Rules governing the system shall be drawn up by the Ministry.
Annual revenue and expenditure budgets for school legal persons and their schools shall be submitted to the legal person authority and school authority, respectively, for reference.
Details of the budgets shall be posted on the schools’ websites until the end of the year for which the budgets are prepared.
Article 53
School legal persons and their schools shall finish preparing reports comparing budget and actual revenues and expenditures in four months after the end of the fiscal year, have them certified by legal person authority-approved CPAs along with the financial statements, and submit them to the legal person authority and school authority, respectively, for reference.
The legal person authority and school authority may inspect or have CPAs inspect school legal persons and their schools’ financial statements, financial statements’ audit reports, internal control and other matters.
School legal persons and their schools shall cooperate with the legal person authority and school authority and provide them with relevant information during the inspection.
School legal persons and their schools’ CPA-certified reports comparing budget and actual revenues and expenditures and financial statements shall be made known to the public in accordance with applicable laws.
Article 54
If a private school’s personnel- or finances-related wrongdoing results in a major dispute which gravely impacts the school’s normal operation which requires an immediate action, the school authority may suspend the headmaster and related personnel, and appoint competent personnel to temporarily take their place.
Headmasters and staff of private schools meeting one of the criteria as set forth in the first paragraph of Article 80 shall be removed after the school authority consults the consultative committee.
Article 55
The school authority shall order private schools poorly run, or breaching the Law or related educational regulations to make improvements by a specified date. The school authority shall hand out one of the following depending on the gravity of the matter at issue after consulting the consultative committee if the schools fail to make improvements by that date:
1. Suspending part or all of the rewards and grants to the private schools.
2. Suspending part or all of the schools’ enrollment activity.