Chinese language school faces funding cuts as probe exposes litany of flaws
A Melbourne-based Chinese Language School which has received millions of taxpayer dollars could have its funding cut after an audit found “serious and concerning” issues.
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A Melbourne Chinese Language School which has received millions of taxpayer dollars faces having its funding cut after an audit found near “catastrophic” conflicts of interest and other “serious and concerning” issues.
The Xin Jin Shan (XJS) Chinese Language and Culture School – whose unorthodox financial practices were exposed in a Herald Sun special investigation last year – had “anomalies and deficiencies … in regard to collection and receipting of tuition fees”, and “absence of supporting documentation for expenses”, the Department of Education and Training (DET) report reveals.
The school, which has a number of different arms including a foundation and Chinese library, and boosts nearly 4000 students, also had an “unusually high amount of donations”, the audit discovered.
The anomalies posed a high risk, with some transactions between related parties resulting in conflicts of interests that bordered on “catastrophic”.
“Based on the results of the review, we believe that Xin Jin Shan Chinese Language and Culture School, do not have adequate governance policies, procedures and practices … particularly in relation to financial controls,” the report states.
A DET spokesman yesterday said the situation was “completely unacceptable” and XJS would be audited again in October to see if it had cleaned up its act.
“It is our expectation that these matters are addressed urgently,” he said.
“If we are not satisfied with the response … we will take immediate action to either recoup funds, suspend funding or terminate the agreement.”
Issues with XJS identified in the DET report include:
ANOMALIES and deficiencies in handling receipts and significant delays in depositing cash into bank accounts.
A LACK OF supporting evidence showing where donations went.
INADEQUATE financial controls over collection and receipting of tuition fees.
AN UNUSUAL increase in the tuition fees over three years which was not matched by a corresponding increase in the number of students.
SHORTFALLS in payments to staff.
XJS LEASED its Mt Waverley headquarters from Mr Sun’s own company for $35,000 a year and also signed another lease agreement for office use at the property for $85,000, giving rise to a conflict of interest.
THE SCHOOL did not maintain a central record of student progress reports.
The Herald Sun exposed the school’s financial practices in September last year, after the husband of a principal at one of the schools many Melbourne ‘campuses’, Jack Zhang, blew the whistle.
A registered charity, XJS reports with the Australian Charities and Not-for-profits Commission.
Those reports reveal it has received about $5 million in State Government funding since 2012, and has collected nearly $7 million in student fees in the past two years alone.
Mr Zhang yesterday said he felt vindicated by the audit’s findings, but wanted to see new management installed.
The school did not respond to a request for comment yesterday.
The Herald Sun investigation revealed XJS had for years received student fees, and paid teachers, in cash.
It also flagged concerns with donations and leasing arrangements.
XJS operates from its own Mount Waverley headquarters but also teaches students through its business, coaching arm out of a number of public, Catholic and private schools across Melbourne’s suburbs, which it refers to as its campuses.
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