l  Preface

Healthy lunches for school children are the foundation for the future of the country. School lunches should not only contain all the nutrients necessary for children’s growth but should also be free from substances harmful to human health. Therefore, great care must be exercised in the selection of school lunch suppliers and the protection of the quality of ingredients and hygiene.

However, recently several cases in elementary schools and junior high schools have emerged where collusion with suppliers has been suspected. In these cases, principals have abused their positions to accept bribes, which have greatly damaged the image of the education sector. Besides corruption on the part of these principals, criminal structures of school personnel procuring the school lunches have been exposed as well. If this had not been investigated and remedied swiftly, the school children’s food intake might have been at risk, and the country’s future will be in jeopardy.

l   Summary of the case

The case started when media reported a scandal of school lunches infested with maggots, which drew much concern from society. A District Prosecutor Office subsequently investigated the case, and the ethics office collecting evidence found that some school personnel used school lunch tenders to allegedly request and receive bribes from certain suppliers as the price to be paid for winning a tender or avoiding fines for violations of regulations. They also used school events to obtain improper benefits and kickbacks from these suppliers. Also, some bidders obtained the lists of names of the tender committee members, whom they paid bribes over an extended period. Some also engaged in bid rigging to win tenders through clandestine agreements in advance. After investigating these facts, the prosecutor interviewed the school personnel and the suppliers and concluded that they had allegedly violated the Anti-Corruption Act, and were thus indicted.

l   Laws violated

1. Anti-Corruption Act

2. Government Procurement Act

3. Ethics Regulations for Procurement Personnel 

4. Ethics Guidelines for Civil Servants

l   Common violations

1.          School personnel and evaluation committee members accept bribes

School lunch procurement cases concern huge amounts of money, with tender volumes ranging from several million Taiwan Dollars to several tens of millions of Taiwan Dollars, and suppliers making every effort to win such tenders. School personnel are aware of this and may abuse the opportunities arising from such tenders to obtain improper benefits and kickbacks from these suppliers, who may withhold a certain amount per child per day as a bribe for the staff. Moreover, when suppliers obtain the list of names of evaluation committee members in advance, they may pay them bribes over an extended period to manipulate the selection results and win the bid.

2.          Abuse of the feedback system generates profit for school staff

Schools usually deploy open tenders, whereby they first select the winning supplier and subsequently negotiate the price. Project feedback and creative content are often the focus of those negotiations. However, "creative feedback" is often unrelated to the purpose of the tender and runs counter to the provisions of the Government Procurement Act. It even causes bidding suppliers to offer bribes under the name of “feedback” to school personnel or selection committee members. The feedback may include covering suppliers when they economize on labor or ingredients or illegally claim falsified expenditures, which amounts to structural corruption. In addition, suppliers may also, for cost considerations, claim unrelated expenditures, which may impact the quality of the school lunches.

3.          Acceptance by parents associations of donations from suppliers and the lack of a supervision mechanism

At present, the competent authorities in charge of education at the county/city levels have regulations regarding parents associations in place, but these regulations do not contain clear provisions regarding acceptance of external donations by those associations, which leads schools to use this channel to accept donations from suppliers without proper review. As these donations do not enter the public treasury and are not kept in separate bank accounts supervised by the schools’ accounting units, it creates opportunities for school personnel to embezzle these monies for personal use and improper gain.

4.          Incomplete implementation of procurement operations resulting in illegal opportunities for school personnel and suppliers

Investigations by the ethics office found that certain lapses would often occur in schools’ procurement practices, such as a lack of a relationship between creative feedback and the quality of school lunches; lacking confidentiality of the list of evaluation committee members; point deductions and fines in deviation from the rules; untruthful delivery inspection reports, etc. This kind of administrative lapses indirectly enabled certain people to escape oversight for relevant laws and regulations and achieve their unlawful purposes.

l   Response from the competent authority

The Ministry of Education, as the competent authority in this matter, subsequently convened several interdepartmental coordination meetings and adopted the following measures to prevent this type of corruption and illegal profiteering in order to effectively mend the shortcomings of the school lunch procurement system:

1.        Strengthen education on integrity and the rule of law

The ministry carries out rigorous rule-of-law education for personnel in charge of school lunch matters. The target group includes principals, section heads, lunch executive secretaries, dietitians, etc. In principle once per semester, a rule-of-law session is held, where procurement laws and regulations are analyzed and applied to everyday practice. This content is also incorporated into training for principals and section heads. The ministry also requests AAC to carry out legal awareness work relating to government ethics (e.g., Ethics Guidelines for Civil Servants, Act on Recusal of Public Servants Due to Conflicts of Interest, etc.), to keep school personnel informed of the latest procurement practices and integrity laws and regulations, and to prevent them from getting in trouble with the law.

2.          Upgrading procurement operations

Measures to improve school lunch procurement include: increase the number of members sitting on selection committees with parents representatives of good reputation and external committee members; formulation of clear selection items and standards; creative feedback that is connected to purpose of the tender; joint procurement by several schools in a region; careful inspection of deliveries and retention of samples; thorough evaluation  of the qualifications of bidders; etc. The ministry has also formulated procurement document templates as references for schools to use. The above measures pushed schools to improve the quality of their procurement operations and a sound mechanism for lunch procurement.

3.          Strict norms for donations by suppliers

Schools are not permitted to accept donations in cash or kind from any contractor. Also, pursuant to the Directions for the Municipalities, Counties, and Provincial Cities Governments’ Elementary and Secondary Schools in their Jurisdictions with Regard to School Lunches, separate bank accounts must be administered in accordance with these Points of Attention and accounting laws and regulations. When a school accepts a donation, earmarked and unspecified donations must be separately kept and managed. A spending supervision mechanism of the parents association ensures public transparency of these accounts and should eliminate concerns in the society.

4.          Implementation of food safety and sanitation measures

To assist the competent authorities in charge of agriculture and health to jointly supervise the safety of school lunch ingredients, the following specific measures have been implemented: develop a joint school lunch audit program; a critical point food control system; monitoring of the quality of school lunch ingredients by the competent authorities in charge of agriculture, health, and education; more thorough inspections; timely publication of inspection results; preferred use of ingredients certified by the competent authority in charge of agriculture; a safety  and sanitation circular; to create multiple inspections and comprehensive supervision in order to safeguard the safety and sanitation “from farm to table” to achieve the purpose of protecting the health of the country’s school children.

l   Suggestions from AAC

School lunches are an important duty of schools. Providing economical, nutritious, clean, and safe school lunches under restraints of labors, resources, and finances may seem simple but is in fact quite complex and related to many kinds of laws and regulations. For the sake of prudence, the following recommendations are offered for consideration:

o  Do the tender documents contain improper restrictions on supplier qualifications or tender specifications that may pose the risk benefiting a certain supplier(s)?

o  Do the selection mechanism, the number of evaluation committee members and the assessment process comply with the relevant requirements of the Government Procurement Act? Have scholars and experts or parent representatives been selected as external members? Are there any conflicts of interest to be considered?

o  Are the measures to maintain the confidentiality of the of selection committee members strong enough?

o  Has any major anomalous connection been found between the tenderer and a bidder(s), raising suspicion of bid rigging?

o  Is the "creative feedback" item relevant to raising school lunch quality? Items unrelated to the purpose of the tender include donations to school events, procurement of equipment unrelated to school lunches, and gifts on the occasion of traditional festivals.

o  Has procurement inspection found any of the items contained in the Table of Common Flaws in School Lunch procurement, published by the inspection authority and the ethics office?

o  Are there a procurement contract and norms, and is their performance reasonable? Such as avoiding of the winning bidder employing school personnel as lunch secretary; or accepting free meals and additional allowances, raising suspicion of misconduct?

o  Does the staff member in charge of checking the quantity, quality, and price of the ingredients do so in a systematic manner, and are there clear inspection standards and an auditing mechanism?

o  Is there a point system for recording violations of regulations?

o  Do the school staff and the members of the selection committee comply with the Ethics Guidelines for Civil Servants and the Ethics Regulations for Procurement Personnel, and refrain from improper contact with the supplier?

o  Do donations accepted by the school comply with regulations and the requirements of government ethics? Such as public disclosure of donor names, and accounting of income and expenses, and are they incorporated within the scope of accounting control? Are there any remittances from bidders into a bank account of the principal, so that the money is not subject to supervision by the school’s accountant unit or the supervising authorities?

l  Conclusion

Education and cultivating people take as long as a century like growing a tree. Proper management of school lunches is closely connected to the physical and mental health of school children. To protect children and the nation’s future, AAC will continue to wholeheartedly assist the competent authorities in managing this issue and provide suggestions for improving the prevention of corruption and jointly build a sound mechanism for school lunch procurement.