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 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

3

The Government's Response

5

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

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

 
156 - 157

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'

 
158 - 160

Appendices relating to Part 3: "Committee Proceedings"

Appendix 3Witnesses who appeared before the Committee

 
161 - 162

Appendix 4Introductory 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 5Opening statement made by Secretary for Transport and Housing at the public hearing on 5 May 2014

 
166 - 170

Appendix 6Opening statement made by Secretary for Development at the public hearing on 5 May 2014

 
171 - 172

Appendix 7Supplementary information dated 9 May 2014 from the Transport and Housing Bureau

 
173 - 180

Appendix 8Letter of 30 May 2014 from Secretary for Transport and Housing

 
181 - 194

Appendix 9Letter of 29 May 2014 from Secretary for Development

 
195 - 197

Appendix 10Letter of 9 June 2014 from Secretary for Development

 
198 - 201

Appendix 11Letter of 30 May 2014 from Secretary for Transport and Housing

 
202 - 224

Appendix 12Letter of 16 May 2014 from Secretary for Transport and Housing

 
225 - 232

Appendices relating to Chapter 2 of Part 4: "Mega Events Fund"

Appendix 13Terms of reference of the MEF Assessment Committee under the original MEF as at June 2009

 
233

Appendix 14Terms of reference of the MEF Assessment Committee under the modified two-tier MEF since June 2012

 
234

Appendix 15Marking scheme detailing the assessment criteria for MEF Tier-2 applications

 
235 - 236

Appendix 16Application form for MEF funding and Guide to Application

 
237 - 292

Appendix 17Standard MEF funding agreement

 
293 - 346

Appendix 18Opening 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 19A 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 20Letter 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 21Letter 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 22Letter 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 23An 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 24Guidelines 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 25MEF-supported events subject to financial sanctions due to failure to achieve target of number of people involved in the event

 
407 - 408

Appendix 26Timetable for the repeated shows of Performance A under Event G

 
409

Appendix 27Email 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 28Standard observation form for MEF-supported event

 
411 - 412

Appendix 29Details 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 30Breakdown 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 31Email 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 32List 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 33Letter 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 34Opening statement made by Secretary for Home Affairs at the public hearing on 5 May 2014

 
449 - 451

Appendix 35Awardees of the Social Enterprise Award Scheme in 2011 and 2013

 
452 - 459

Appendix 36An article entitled "由社會企業到社企金融" by Secretary for Home Affairs

 
460 - 461

Appendix 37Letter of 2 May 2014 from Director of Social Welfare

 
462 - 466

Appendix 38Letter of 2 May 2014 from Director of Home Affairs

 
467 - 470

Appendix 39Research 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 40Letter of 5 June 2014 from Secretary for the Civil Service

 
478 - 481

Appendix 41Letter of 30 May 2014 from Commissioner of Correctional Services

 
482 - 484

Appendix 42Letter of 30 May 2014 from Secretary for Education

 
485 - 486

Appendix 43Letter of 30 May 2014 from Director of Food and Environmental Hygiene

 
487 - 490

Appendix 44Letter of 30 May 2014 from Director of Leisure and Cultural Services

 
491 - 492

ACRONYMS AND ABBREVIATIONS

 
493 - 495