Public Accounts Committee

REPORT OF THE

PUBLIC ACCOUNTS COMMITTEE

ON

REPORT NO. 62 OF THE DIRECTOR OF AUDIT

ON

THE RESULTS OF

VALUE FOR MONEY AUDITS

July 2014

P.A.C. Report No. 62

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 - 3
	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.	Planning, construction and redevelopment of public rental housing flats
		A.	Introduction	1 - 11	5 - 7
		B.	Planning for the provision of public rental housing flats	12 - 46	7 - 23
		C.	Management of public rental housing construction projects	47 - 59	23 - 29
		D.	Redevelopment of public rental housing estates	60 - 73	29 - 35
		E.	Way forward	74 - 79	35 - 38
		F.	Conclusions and recommendations	80 - 82	39 - 53
	2.	Mega Events Fund
		A.	Introduction	1 - 13	54 - 58
		B.	Achievement of the Mega Events Fund ("MEF") objectives	14 - 39	58 - 71
		C.	Assessment of applications	40 - 63	71 - 81
		D.	Monitoring and evaluation of events	64 - 104	81 - 97
		E.	Way forward	105 - 112	98 - 100
		F.	Conclusions and recommendations	113 - 115	101 - 115
	3.	CreateSmart Initiative		1 - 4	116
	4.	Promoting the development of social enterprises
		A.	Introduction	1 - 5	117 - 118
		B.	Government policy on social enterprise	6 - 19	118 - 125
		C.	Enhancing Employment of People with Disabilities through Small Enterprise Project ("the 3E Project")	20 - 48	125 - 132
		D.	Enhancing Self-Reliance Through District Partnership Programme ("the ESR Programme")	49 - 73	132 - 141
		E.	Publicity and promotional work	74 - 77	141 - 142
		F.	Conclusions and recommendations	78 - 80	142 - 151
	5.	Recruitment of staff		1 - 4	152 - 153
SIGNATURES OF THE CHAIRMAN, DEPUTY CHAIRMAN AND MEMBERS OF THE COMMITTEE					154
CHAPTERS IN THE DIRECTOR OF AUDIT'S REPORT NO. 62 DEALT WITH IN THE PUBLIC ACCOUNTS COMMITTEE'S REPORT					155
Appendix relating to Part 1: "Introduction"
Appendix 1	Rules of Procedure of the Legislative Council of the Hong Kong Special Administrative Region				156 - 157
Appendix relating to Part 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'				158 - 160
Appendices relating to Part 3: "Committee Proceedings"
Appendix 3	Witnesses who appeared before the Committee				161 - 162
Appendix 4	Introductory Remarks by Chairman of the Public Accounts Committee, Hon Abraham SHEK Lai-him, GBS, JP at the first public hearing of the Committee in respect of the Director of Audit's Report No. 62 on 5 May 2014				163 - 165
Appendices relating to Chapter 1 of Part 4: "Planning, construction and redevelopment of public rental housing flats"
Appendix 5	Opening statement made by Secretary for Transport and Housing at the public hearing on 5 May 2014				166 - 170
Appendix 6	Opening statement made by Secretary for Development at the public hearing on 5 May 2014				171 - 172
Appendix 7	Supplementary information dated 9 May 2014 from the Transport and Housing Bureau				173 - 180
Appendix 8	Letter of 30 May 2014 from Secretary for Transport and Housing				181 - 194
Appendix 9	Letter of 29 May 2014 from Secretary for Development				195 - 197
Appendix 10	Letter of 9 June 2014 from Secretary for Development				198 - 201
Appendix 11	Letter of 30 May 2014 from Secretary for Transport and Housing				202 - 224
Appendix 12	Letter of 16 May 2014 from Secretary for Transport and Housing				225 - 232
Appendices relating to Chapter 2 of Part 4: "Mega Events Fund"
Appendix 13	Terms of reference of the MEF Assessment Committee under the original MEF as at June 2009				233
Appendix 14	Terms of reference of the MEF Assessment Committee under the modified two-tier MEF since June 2012				234
Appendix 15	Marking scheme detailing the assessment criteria for MEF Tier-2 applications				235 - 236
Appendix 16	Application form for MEF funding and Guide to Application				237 - 292
Appendix 17	Standard MEF funding agreement				293 - 346
Appendix 18	Opening statement made by Permanent Secretary for Commerce and Economic Development (Commerce, Industry and Tourism) at the public hearing on 12 May 2014				347 - 350
Appendix 19	A summary of the implementation status of the recommendations made by the Corruption Prevention Department ("CPD") of the Independent Commission Against Corruption ("ICAC") in September 2010 on the administration of the MEF				351 - 354
Appendix 20	Letter of 15 November 2010 from the CPD of the ICAC to the Tourism Commission ("TC") enclosing the CPD's Assignment Report of September 2010 on the administration of the MEF				355 - 383
Appendix 21	Letter of 20 May 2014 from Commissioner, ICAC providing a response on the reasons for the ICAC's suggested changes to paragraph 1.11 of the draft Chapter 3 of the Director of Audit's Report No. 62				384 - 385
Appendix 22	Letter of 20 May 2014 from Director of Corruption Prevention, ICAC providing a response on the reason for members of the Corruption Prevention Advisory Committee ("CPAC") to raise the concern about the need for continuing the MEF and the number of CPAC members who had raised such concern				386
Appendix 23	An MEF Assessment Committee paper entitled "An overall review of the Mega Events Fund" enclosing a summary of the ICAC's recommendations and the implementation status				387 - 404
Appendix 24	Guidelines on level of sanction to be imposed on MEF grantees in the case of non-compliance with the terms and conditions in the funding agreements				405 - 406
Appendix 25	MEF-supported events subject to financial sanctions due to failure to achieve target of number of people involved in the event				407 - 408
Appendix 26	Timetable for the repeated shows of Performance A under Event G				409
Appendix 27	Email of 15 May 2014 from Mr KO Chi-sum, Representative of the organizers of Event G, providing information on the dates on which Performance A under Event G was staged in Macau and Canada				410
Appendix 28	Standard observation form for MEF-supported event				411 - 412
Appendix 29	Details of the MEF-supported events seeking extension of deadline for submitting the post-event evaluation report, publicity report, survey report and final audited accounts				413 - 414
Appendix 30	Breakdown of the expenditure items which fell within the scope of expenditure that may be covered by the MEF funding for Events C1, C2, C3 and C4				415 - 416
Appendix 31	Email of 14 June 2014 from Mr KO Chi-sum, Representative of the organizers of Event G, on the provision of supporting documents for overseas TV advertisements				417
Appendix 32	List of measures/actions that will be taken by the TC to enhance the control and monitoring mechanism of the MEF				418 - 420
Appendix relating to Chapter 3 of Part 4: "CreateSmart Initiative"
Appendix 33	Letter of 19 June 2014 from Permanent Secretary for Commerce and Economic Development (Communications and Technology)				421 - 448
Appendices relating to Chapter 4 of Part 4: "Promoting the development of social enterprises"
Appendix 34	Opening statement made by Secretary for Home Affairs at the public hearing on 5 May 2014				449 - 451
Appendix 35	Awardees of the Social Enterprise Award Scheme in 2011 and 2013				452 - 459
Appendix 36	An article entitled "由社會企業到社企金融" by Secretary for Home Affairs				460 - 461
Appendix 37	Letter of 2 May 2014 from Director of Social Welfare				462 - 466
Appendix 38	Letter of 2 May 2014 from Director of Home Affairs				467 - 470
Appendix 39	Research report entitled "Social Return on Investment of Enhancing Self-Reliance through District Partnership projects" published by the Fullness Social Enterprises Society in June 2013				471 - 477
Appendices relating to Chapter 5 of Part 4: "Recruitment of staff"
Appendix 40	Letter of 5 June 2014 from Secretary for the Civil Service				478 - 481
Appendix 41	Letter of 30 May 2014 from Commissioner of Correctional Services				482 - 484
Appendix 42	Letter of 30 May 2014 from Secretary for Education				485 - 486
Appendix 43	Letter of 30 May 2014 from Director of Food and Environmental Hygiene				487 - 490
Appendix 44	Letter of 30 May 2014 from Director of Leisure and Cultural Services				491 - 492
ACRONYMS AND ABBREVIATIONS					493 - 495