Using eBay &
PayPal in Schools.
We are regularly contacted by schools that are
considering using eBay to purchase or sell items, to ask if Internal Audit has any
guidance or procedures that we can provide them with.
We have no specific guidance as such on the
use of eBay and whilst we are broadly in support of using this it is for each school
to determine its own procedures for use and to be mindful of the potential
risks involved. Sensible eBay trading
can give the school cost efficiencies on purchases made, whereas eBay’s
electronic auction mechanism can ensure “best price” is obtained on sales.
It is also recommended that the school seeks
formal approval from its Finance Committee to use eBay, providing them with details
of the controls in place to control its use and to minimise any risks.
There is a great deal of information
contained both on eBay and PayPal websites which provide advice on how to
minimise risk associated with using these. Schools should familiarise themselves with
this information.
It is understood
that eBay offers an eBay Buyer Protection where payments are made using PayPal,
hence this would be the sensible method for making payments. For more
information please see the attached link:
Below are a few points you need to take into
consideration before actively using eBay and PayPal:
- Any
accounts for using eBay will need to be set up as business accounts in the
name of the school as opposed to personal accounts.
- There
should be no personal sales or purchases through the school’s eBay
account.
- If
using PayPal, accounts will need to be linked to the School Payment Card. Consider how the school will account for
any purchases / sales. Ensure there are prompt reconciliation procedures
in place to identify any possible fraudulent transactions at an early
stage. We understand that payments made using
PayPal are secure but you should ensure that you refer and adhere to the specific terms and conditions.
- Payment
for goods will ordinarily be required before goods have been received, (although
PayPal may provide some form of recompense where goods are not received). This heightens a school’s exposure to
risk. Make purchases through
reputable traders (i.e. those with significant levels of positive eBay
feedback).
- Consider
any commission that may need to be paid on any sales from the use of
PayPal.
- There
will be costs associated with postage and packaging, staff time taking
items to the Post Office, collection charges etc which need to be
considered.
- Any
items sold through eBay should be advertised as ‘sold as seen’ to avoid
any comeback on the school. Consider what you would do if buyers wanted to
return goods that they felt were not of merchantable quality.
- Consider
also what would happen should goods you have sold not be received by the
buyer – do you need to take out insurance to cover this.
- When
selling ICT equipment ensure that all data and software has been
completely removed by a suitably
qualified IT professional. The serious implications should personal data
be made public have been widely publicised, as are the risks of
transferring software licensed to the school to a third party (e.g.
Microsoft products). Pupil and
other personal / sensitive data must never be compromised.
- If purchasing from abroad be aware
of import duties / delivery charges which may mean the goods would have
been cheaper if purchased from the UK.
- VAT will also generally need to be accounted for on sales - contact Bev King, Taxation Co-ordinator (bev.king@leics.gov.uk – 0116 305 7670) if you require any advice.
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