Confusing rules leave foreign schools unsupervised

By Kim Bo-eun

Confusing regulations on foreign schools have left them mostly unsupervised by local education authorities, enabling irregularities in the management of school funds.

The baffling regulations on the education office’s authority over auditing the schools’ finances surfaced after officials of Dulwich College Seoul (DCS), a foreign school based in southern Seoul, were indicted Tuesday on charges of having embezzled 7.5 billion won in tuition fees.

The Ministry of Education and the Seoul Metropolitan Office of Education (SMOE) agree on the latter’s authority to audit foreign schools’ finances, based on the act governing private schools.

However, the two have differing interpretations of another act governing elementary and secondary school education. The education ministry says this act requires auditing by the SMOE, but the education office says it is not required to assume the role.

Based on its interpretation of the act, the SMOE has not audited foreign schools’ finances.

Up until now, it has been conducting inspections on other areas such as enrollment, but this was only done once every two years, according to an SMOE official, Thursday.

The official said, however, the education office “will start to conduct audits and abide by the act governing private schools.”

“We are also planning to hold inspections once a year,” he said.

An official from the education ministry said it was clearly the SMOE’s role to conduct audits.

However, she said education authorities are only authorized to carry out audits when they receive a report of irregularities.

The ministry official said the foreign schools are required to make public their financial information in nine areas, but added this was not done in detail.

She added that foreign schools are not subject to stringent supervision as they do not receive public funding from local authorities.

“Foreign schools do not receive funding from the education authority and are run on tuition paid by students, so they are given more autonomy,” she said.

At DCS, 25 percent of the students are Korean nationals, paying 30 million won a year. In addition, the Seoul Metropolitan Government is leasing the school site at 1 percent of the appraised value. For these reasons, some critics contend there is a need for stricter supervision of foreign schools.

Earlier this week, the Seoul Central District Prosecutor’s Office indicted three board members of DCS for embezzling funds through a paper company set up in Hong Kong.

They are suspected of having used the embezzled money to pay off loans and other expenses from 2010 to 2015. They allegedly received the loans to fund the construction of the school's Seoul branch.

However, legal representatives of the school said the allegations were groundless.

The Seoul branch of Dulwich College, a boys’ day and boarding school headquartered in London, opened in September 2010. It is one of the most desired schools among wealthy parents.