REPORT OF THE

PUBLIC ACCOUNTS COMMITTEE

ON

REPORT NO. 50 OF THE DIRECTOR OF AUDIT

ON

THE RESULTS OF

VALUE FOR MONEY AUDITS



July 2008

P.A.C. Report No. 50

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CONTENTS
				Paragraph	Page
Part 1	Introduction
	The Establishment of the Committee			1	1
	Membership of the Committee			2	1
Part 2	Procedure
	The Committee's Procedure			1	2
	Confidentiality undertaking by members of the Committee			2 - 3	3
	The Committee's Report			4	3
	The Government's Response			5	3
Part 3	Committee 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 4	Chapter
	1.	Commercialisation and utilisation of government properties
		A.	Introduction	1	5
		B.	Commercialisation of government properties	2 - 25	5 - 14
		C.	Management and reporting of identified commercialisation opportunities	26 - 29	14 - 15
		D.	Utilisation of vacant and surplus government properties	30 - 35	16 -17
		E.	Conclusions and recommendations	36	18 - 22
	2.	The Society for the Aid and Rehabilitation of Drug Abusers
		A.	Introduction	1 - 2	23 - 24
		B.	Management and control of government subvention	3 - 13	24 - 29
		C.	Corporate governance	14 - 38	30 - 39
		D.	Strategic management	39 - 49	39 - 43
		E.	Conclusions and recommendations	50	43 - 49
	3.	Works contracts for a Lantau development		1 - 7	50 - 51
SIGNATURES OF THE CHAIRMAN, DEPUTY CHAIRMAN AND MEMBERS OF THE COMMITTEE					52
CHAPTERS IN THE DIRECTOR OF AUDIT'S REPORT NO. 50 DEALT WITH IN THE PUBLIC ACCOUNTS COMMITTEE'S REPORT					53
Appendix relating to 1: "Introduction"
APPENDIX 1	Rules of Procedure of the Legislative Council of the Hong Kong Special Administrative Region				54 - 55
APPENDIX relating to 2: "Procedure"
APPENDIX 2	Paper 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'				56 - 58
Appendices relating to 3: "Committee Proceedings"
APPENDIX 3	Witnesses who appeared before the Committee				59 - 60
APPENDIX 4	Introductory 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 Tuesday, 22 April 2008				61 - 62
Appendices relating to Chapter 1 of Part 4: "Commercialisation and utilisation of government properties"
APPENDIX 5	Letter of 15 May 2008 from the Government Property Administrator				63 - 98
APPENDIX 6	Accommodation Circular No. 1/97: "Rent for Premises in Government Buildings Occupied by Non-Governmental Organisations"				99 - 104
APPENDIX 7	Preliminary cost-benefit analysis conducted by the Government Property Agency in February 2008				105 - 107
APPENDIX 8	Letter of 16 May 2008 from the Director of Audit				108 - 110
APPENDIX 9	Letter of 9 May 2008 from the Secretary for Financial Services and the Treasury				111 - 112
APPENDIX 10	Letter of 9 May 2008 from the Director of Buildings				113 - 114
Appendices relating to Chapter 2 of Part 4: "The Society for the Aid and Rehabilitation of Drug Abusers"
APPENDIX 11	Opening statement made by the Secretary for Security at the public hearing on 22 April 2008				115 - 117
APPENDIX 12	Letter of 5 May 2008 from the Director of Health				118 - 122
APPENDIX 13	Letter of 15 May 2008 from the Director of Health				123 - 128
APPENDIX 14	Letter of 2 May 2008 from the Executive Director of The Society for the Aid and Rehabilitation of Drug Abusers				129 - 144
APPENDIX 15	Letter of 6 May 2008 from the Commissioner for Narcotics				145 - 147
APPENDIX 16	Letter of 6 May 2008 from the Director of Social Welfare				148 - 151
APPENDIX 17	Letter of 15 May 2008 from the Secretary for Security				152 - 153
Appendix relating to Chapter 3 of Part 4: "Works contracts for a Lantau development"
APPENDIX 18	Letter of 22 April 2008 from the Director of Civil Engineering and Development				154 - 155
ACRONYMS AND ABBREVIATIONS					156