REPORT OF THE

PUBLIC ACCOUNTS COMMITTEE

ON

REPORT NO. 48 OF THE DIRECTOR OF AUDIT

ON

THE RESULTS OF

VALUE FOR MONEY AUDITS

AND

SUPPLEMENTAL REPORT OF THE

PUBLIC ACCOUNTS COMMITTEE

ON

REPORT NO. 47 OF THE DIRECTOR OF AUDIT

ON

THE RESULTS OF

VALUE FOR MONEY AUDITS



July 2007

P.A.C. Report No. 48






CONTENTS


Paragraph

Page

Part 1Introduction

The Establishment of the Committee

1

1

Membership of the Committee

2

1

Part 2Procedure

The Committee's Procedure

1

2

Confidentiality undertaking by members of the Committee

2 - 3

3

The Committee's Report

4 - 5

3

The Government's Response

6

3

Part 3Committee Proceedings

Consideration of the Director of Audit's Report

1

4

Meetings

2

4

Arrangement of the Report

3 - 4

4

Acknowledgements

5

4

Part 4Chapter

Supplemental report on the Director of Audit's Report No. 47

1.Administration of short term tenancies

A.Introduction

1 - 2

5

B.Administration of rent arrears

3 - 23

5 - 12

C.Monitoring of tenant's performance

24 - 27

13 - 14

D.Enforcement action on unauthorised use of sites for car-park purposes

28 - 38

14 - 16

E.Enforcement action on unauthorised use of site for residential purposes

39 - 71

17 - 27

F.Conclusions and recommendations

72

27 - 33

Report on the Director of Audit's Report No. 48

2.Administration of Hong Kong Applied Science and Technology Research Institute Company Limited

A.Introduction

1 - 3

34

B.Corporate governance

4 - 38

34 - 46

C.Remuneration and recruitment

39 - 55

46 - 53

D.Project management

56 - 63

53 - 54

E.Project cost control

64 - 65

54 - 55

F.Administrative issues

66 - 82

56 - 60

G.Cost and achievements of ASTRI

83 - 87

60 - 61

H.ASTRI's response to the Audit Report

88 - 90

61 - 62

I.Conclusions and recommendations

91

62 - 70

3.Management of government fresh food wholesale markets

A.Introduction

1 - 2

71

B.Letting of market facilities

3 - 25

71 - 78

C.Managing the daily operation of wholesale markets

26 - 38

78 - 83

D.Reprovisioning of outdated wholesale markets

39 - 50

83 - 87

E.Other areas for improvement

51 - 55

87 - 88

F.Conclusions and recommendations

56

89 - 92

SIGNATURES OF THE CHAIRMAN, DEPUTY CHAIRMAN AND MEMBERS OF THE COMMITTEE




93

CHAPTERS IN THE DIRECTOR OF AUDIT'S REPORT NOS. 47 AND 48 DEALT WITH IN THE PUBLIC ACCOUNTS COMMITTEE'S REPORT




94

Appendix relating to Part 1: "Introduction"

APPENDIX 1Rules of Procedure of the Legislative Council of the Hong Kong Special Administrative Region




A1 - A2

Appendix relating to Part 2: "Procedure"

APPENDIX 2Paper presented to the Provisional Legislative Council by the Chairman of the Public Accounts Committee at the meeting on 11 February 1998 on Scope of Government Audit in the Hong Kong Special Administrative Region - 'Value for Money Audits'




A3 - A5

Appendices relating to Part 3: "Committee Proceedings"

APPENDIX 3Witnesses who appeared before the Committee


A6 - A7

APPENDIX 4Introductory remarks by the Chairman of the Public Accounts Committee, Dr Hon Philip WONG Yu-hong, GBS, at the first public hearing of the Committee on Thursday, 26 April 2007




A8 - A9

Appendices relating to Chapter 1 of Part 4: "Administration of short term tenancies"

APPENDIX 5Letter of 11 December 2006 from the Director of Lands


A10 - A22

APPENDIX 6Letter of 19 December 2006 from the Director of Lands


A23 - A27

APPENDIX 7Letter of 17 January 2007 from the Director of Lands


A28 - A29

APPENDIX 8Letter of 8 June 2007 from the Director of Lands


A30 - A31

APPENDIX 9Replies provided by the Director of Lands


A32 - A33

APPENDIX 10Letter of 15 December 2006 from Mr CHAN Kwok-fai


A34

APPENDIX 11Letter of 12 April 2007 from Mr CHAN Kwok-fai


A35

APPENDIX 12Photographs taken on 22 October 2002


A36 - A38

APPENDIX 13Photographs taken on 4 December 2002


A39 - A42

APPENDIX 14Letter of 11 April 2007 from Mr LEUNG Kwai-lam


A43 - A48

APPENDIX 15Letter of 2 May 2007 from Mr LEUNG Kwai-lam


A49 - A50

Appendices relating to Chapter 2 of Part 4: "Administration of Hong Kong Applied Science and Technology Research Institute Company Limited"

APPENDIX 16Statement issued by Dr Robert YANG, Chief Executive Officer of the Hong Kong Applied Science and Technology Research Institute Company Limited (ASTRI), upon his resignation on 24 April 2007




A51

APPENDIX 17Opening statement made by the ASTRI Board Chairman at the public hearing on 26 April 2007




A52 - A55

APPENDIX 18Letter of 18 May 2007 from the ASTRI Board Chairman


A56 - A77

APPENDIX 19Letter of 26 April 2007 from the Director of Audit


A78

APPENDIX 20Letter of 30 April 2007 from the ASTRI Board Chairman


A79 - A90

APPENDIX 21Letter of 24 May 2007 from the ASTRI Board Chairman


A91- A94

APPENDIX 22Letter of 12 June 2007 from the ASTRI Board Chairman


A95 - A121

APPENDIX 23Letter of 13 June 2007 from the ASTRI Board Chairman


A122 - A125

APPENDIX 24Letter of 1 June 2007 from the ASTRI Board Chairman


A126 - A131

APPENDIX 25Letter of 15 June 2007 from the ASTRI Board Chairman


A132 - A135

APPENDIX 26Letter of 18 May 2007 from the ASTRI Board Chairman


A136 - A144

APPENDIX 27Letter of 31 May 2007 from the Director of Audit


A145 - A146

APPENDIX 28Letter of 15 June 2007 from the Director of Audit


A147

Appendices relating to Chapter 3 of Part 4: "Management of government fresh food wholesale markets"

APPENDIX 29Opening statement made by the Secretary for Health, Welfare and Food at the public hearing on 30 April 2007




A148 - A149

APPENDIX 30Opening statement made by the Director of Agriculture, Fisheries and Conservation at the public hearing on 30 April 2007




A150 - A151

APPENDIX 31Letter of 27 April 2007 from the Acting Director of Agriculture, Fisheries and Conservation




A152 - A157

APPENDIX 32Letter of 14 May 2007 from the Director of Agriculture, Fisheries and Conservation




A158 - A160

APPENDIX 33Letter of 27 April 2007 from the Secretary for Health, Welfare and Food


A161 - A167

APPENDIX 34Letter of 4 June 2007 from the Secretary for Health, Welfare and Food


A168 - A169

APPENDIX 35Letter of 4 June 2007 from the Director of Agriculture, Fisheries and Conservation




A170 - A171

APPENDIX 36Letter of 11 May 2007 from the Director of Lands


A172 - A173

APPENDIX 37Letter of 11 May 2007 from the Government Property Administrator


A174

ACRONYMS AND ABBREVIATIONS



A175 - A176