REPORT OF THE

PUBLIC ACCOUNTS COMMITTEE

ON

THE REPORTS OF THE DIRECTOR OF AUDIT

ON

THE ACCOUNTS OF THE GOVERNMENT OF

THE HONG KONG SPECIAL ADMINISTRATIVE REGION

FOR THE YEAR ENDED

31 MARCH 2010

AND THE RESULTS OF

VALUE FOR MONEY AUDITS (Report No. 55)



February 2011

P.A.C. Report No. 55





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 - 3

Confidentiality undertaking by members of the Committee

2 - 3

3

The Committee's Report

4 - 5

3

The Government's Response

6

4

Part 3Report of the Public Accounts Committee on Report No. 52 of the Director of Audit on the Results of Value for Money Audits
[P.A.C. Report No. 52]

Laying of the Report

1

5

The Government Minute

2 - 4

5 - 6

Part 4Report of the Public Accounts Committee on the Reports of the Director of Audit on the Accounts of the Government of the Hong Kong Special Administrative Region for the year ended 31 March 2009 and the Results of Value for Money Audits (Report No. 53)
[P.A.C. Report No. 53]

Laying of the Report

1

7

The Government Minute

2 - 40

7 - 27

Part 5Supplemental Report of the Public Accounts Committee on Report No. 53 of the Director of Audit on the Results of Value for Money Audits
[P.A.C. Report No. 53A]

Laying of the Report

1

28

The Government Minute

2 - 4

28 - 30

Part 6Committee Proceedings

Consideration of the Director of Audit's Report

1

31

Meetings

2

31

Arrangement of the Report

3 - 4

31

Acknowledgements

5

31

Part 7Observations of the Public Accounts Committee on the Report of the Director of Audit on the Accounts of the Government of the Hong Kong Special Administrative Region for the year ended 31 March 2010

1 - 11

32 - 34

Part 8Chapter

1.Administration of the Direct Subsidy Scheme and Governance and Administration of Direct Subsidy Scheme Schools

A.Introduction

1 - 12

35 - 38

B.Service agreement with school sponsoring body

13 - 37

39 - 49

C.Service agreement with incorporated school governing body

38 - 41

50

D.School fee remission/scholarship schemes

42 - 80

51 - 69

E.Revision of school fees

81 - 104

70 - 78

F.Financial management

105 - 124

79 - 87

G.Admission process

125 - 133

87 - 91

H.Monitoring school performance

134 - 141

91 - 94

I.Direct subsidy scheme subsidy

142 - 146

94 - 95

J.International schools in the direct subsidy scheme

147 - 153

95 - 97

K.Human resource management

154 - 155

97 - 98

L.General administration and other governance issues

156 - 159

98 - 99

M.Conclusions and recommendations

160

99 - 117

2.Residential treatment and rehabilitation services for drug abusers

A.Introduction

1 - 3

118

B.Allocation of resources to SARDA

4 - 16

118 - 124

C.Usage of treatment centres

17 - 51

124 - 136

D.Treatment centres on government sites/premises

52 - 66

136 - 141

E.Licensing of treatment centres

67 - 77

141 - 146

F.Conclusions and recommendations

78

146 - 157

3.The Community Investment and Inclusion Fund

A.Introduction

1 - 4

158

B.Development of social capital

5 - 36

158 - 172

C.Assessment and monitoring of projects

37 - 39

172 - 173

D.Governance of the Community Investment and Inclusion Fund and use of funds by grantees

40 - 52

173 - 179

E.Conclusions and recommendations

53

179 - 185

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



186

CHAPTERS IN THE DIRECTOR OF AUDIT'S REPORT NO. 55 DEALT WITH IN THE PUBLIC ACCOUNTS COMMITTEE'S REPORT



187

Appendix relating to Part 1: "Introduction"

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



188 - 189

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'



190 - 193

Appendix relating to Part 4: "Report of the Public Accounts Committee on the Reports of the Director of Audit on the Accounts of the Government of the Hong Kong Special Administrative Region for the year ended 31 March 2009 and the Results of Value for Money Audits (Report No. 53)
[P.A.C. Report No. 53]"

Appendix 3Letter of 25 January 2011 from the Secretary for Development



194 - 195

Appendix relating to Part 5: "Supplemental Report of the Public Accounts Committee on Report No. 53 of the Director of Audit on the Results of Value for Money Audits
[P.A.C. Report No. 53A]"

Appendix 4Updated progress of implementing Audit's recommendations in respect of "Control of western medicines"



196 - 203

Appendices relating to Part 6: "Committee Proceedings"

Appendix 5Witnesses who appeared before the Committee



204 - 205

Appendix 6Introductory remarks by the Chairman of the Public Accounts Committee, Dr Hon Philip WONG Yu-hong, GBS, at the first public hearing of the Committee in respect of the Director of Audit's Report No. 55 on Monday, 29 November 2010



206 - 207

Appendices relating to Part 7: "Observations of the Public Accounts Committee on the Report of the Director of Audit on the Accounts of the Government of the Hong Kong Special Administrative Region for the year ended 31 March 2010"

Appendix 7Letter of 10 January 2011 from the Director of Audit



208 - 211

Appendix 8Letter of 24 January 2011 from the Secretary for Financial Services and the Treasury



212 - 216

Appendices relating to Chapter 1 of Part 8: "Administration of the Direct Subsidy Scheme and Governance and Administration of Direct Subsidy Scheme Schools"

Appendix 9Letter of 23 November 2010 from the Secretary for Education



217 - 237

Appendix 10Opening statement made by the Director of Audit at the public hearing on 29 November 2010



238 - 239

Appendix 11Opening statement made by the Secretary for Education at the public hearing on 29 November 2010



240 - 242

Appendix 12Letter of 17 December 2010 from the Secretary for Education



243 - 254

Appendix 13Letter of 10 December 2010 from the Secretary for Education



255 - 261

Appendix 14Letter of 8 December 2010 from the Secretary for Education



262 - 286

Appendix 15Letter of 27 January 2011 from the Director of Audit



287 - 288

Appendix 16Letter of 28 January 2011 from the Secretary for Education



289 - 290

Appendix 17Letter of 25 November 2010 from the Secretary for Education



291 - 293

Appendix 18Letter of 1 December 2010 from the Secretary for Education



294 - 295

Appendix 19Letter of 11 December 2010 from the Secretary for Education



296 - 341

Appendix 20Letter of 17 December 2010 from the Secretary for Education



342 - 350

Appendix 21Letter of 30 December 2010 from the Secretary for Education



351 - 359

Appendix 22Letter of 24 January 2011 from the Secretary for Education



360 - 361

Appendices relating to Chapter 2 of Part 8: "Residential treatment and rehabilitation services for drug abusers"

Appendix 23Opening statement made by the Secretary for Security at the public hearing on 7 December 2010



362 - 365

Appendix 24Opening statement made by the Secretary for Labour and Welfare at the public hearing on 7 December 2010



366 - 367

Appendix 25Letter of 22 December 2010 from the Secretary for Security



368 - 384

Appendix 26Letter of 17 January 2011 from the Secretary for Security



385 - 388

Appendix 27Letter of 1 December 2010 from the Director of Social Welfare



389 - 392

Appendices relating to Chapter 3 of Part 8: "The Community Investment and Inclusion Fund"

Appendix 28Opening statement made by the Secretary for Labour and Welfare at the public hearing on 30 November 2010



393 - 397

Appendix 29Letter of 29 November 2010 from the Secretary for Labour and Welfare



398 - 449

Appendix 30Letter of 17 December 2010 from the Secretary for Labour and Welfare



450 - 468

Appendix 31Letter of 7 January 2011 from the Secretary for Labour and Welfare



469 - 474

ACRONYMS AND ABBREVIATIONS



475 - 477