Corruption watchdog clears IAS in Smart Nursery termination case

The Commission Against Corruption (CCAC) has concluded its inquiry into the Social Welfare Bureau’s (IAS) termination of its cooperation agreement with the Zonta Club of Macau over the operation of Smart Nursery in Taipa.

The investigation, however, revealed that the Zonta Club had committed irregularities in staff employment, financial management, and subsidy utilization at the nursery, and had failed to rectify these issues in a timely manner, which affected the quality of childcare services, according to a CCAC statement released yesterday.

The case originated in March last year, when the Zonta Club filed a complaint alleging that the IAS had breached the law and abused its power in terminating the cooperation agreement.

The CCAC launched an inquiry in response to public concern and to determine whether the procedures and decisions involved were lawful and reasonable.

According to the investigation, the IAS signed a cooperation agreement with the Zonta Club in 2019 to establish Smart Nursery.

However, starting in July 2020, the bureau conducted multiple operational and healthcare inspections and found that the nursery had been understaffed for an extended period, falling short of the standard staffing levels stipulated in the agreement.

Some staff members who received direct government subsidies, including teaching assistants and housework helpers, were not even present at the nursery.

The IAS made repeated written requests for explanations or proof of employment, but the data provided by the Zonta Club was inconsistent with information registered on the official reporting platform, violating both the subsidy guidelines and the cooperation agreement.

The club also failed to take corrective measures as required.

The CCAC further discovered that some of the personnel who were absent from the nursery were full-time employees of other companies, with some having been out of Macau for extended periods.

By occupying subsidized positions, these individuals prevented the nursery from reaching the staffing levels needed to maintain quality service, the commission said.

Financial irregularities were also uncovered.

Between 2021 and 2023, the IAS identified multiple unusual expenses that could not be justified as operational costs.

Despite repeated requests for detailed explanations and supporting documents, the Zonta Club failed to prove that the expenditures were related to the nursery’s operations.

Some expenses were eventually accepted after further review, but others remained unsubstantiated, and the club never returned the funds to the nursery’s account as required.

Whether subsidy usage complies with regulations remains subject to the IAS’s own review and judgment.

Given the Zonta Club’s repeated breaches of the agreement, the IAS initiated termination procedures in accordance with relevant laws and the contract.

Although the bureau cited the 2019 agreement rather than the re-signed 2024 version, the CCAC found this did not preclude the use of Decree-Law No. 22/95/M as the legal basis for early termination.

The CCAC concluded that the IAS’s determination that the cooperative relationship could not be sustained was based on factual and legal grounds. The case has been closed.

Meanwhile, according to a TDM report, Smart Nursery director Christiana Ieong Pou Yee said the organization would hold a meeting to discuss its next steps. She said that if the government ultimately requires the nursery to cease operations, it would have no choice but to close, while stressing that the organization would fully cooperate.

The nursery currently has more than 70 children enrolled and has stopped accepting applications for the 2026/2027 academic year. Ieong said the nursery had maintained communication with the IAS since its establishment.

While the two sides had differences over accounting systems and other matters, she said the nursery had consistently submitted the required financial records and documents and provided explanations when requested. She added that the nursery had never intended to mislead authorities and described the IAS’ decision to terminate the cooperation agreement as unfair.

In a statement released last night, the IAS said that it has required Smart Nursery to return the facilities and assist parents in transferring their children to other childcare centers.