**SIR, TABLED IN THIS COUNCIL TODAY IS THE REPORT OF THE DIRECTOR OF AUDIT ON THE ACCOUNTS OF THE GOVERNMENT FOR THE YEAR ENDED 31 MARCH 1985. ALSO TABLED IS A GOVERNMENT PAPER IN RESPONSE TO COMMENTS ON CERTAIN POLICY ISSUES IN THE REPORT. I WOULD LIKE BRIEFLY TO EXPLAIN THE REASONS FOR GOVERNMENT
PROCEEDING IN THIS WAY.
THE APPROPRIATE FORUM FOR CONSIDERING POLICY ISSUES, INCLUDING ANY THAT MAY BE RAISED IN THE DIRECTOR OF AUDIT'S ANNUAL REPORT, IN THIS COUNCIL WHERE THEY CAN BE PROPERLY AND FULLY DEBATED. MOREOVER, FROM A PRACTICAL POINT OF VIEW, CONTROLLING OFFICERS WHO ARE REQUIRED TO APPEAR BEFORE THE PUBLIC ACCOUNTS COMMITTEE, ARE RARELY THE OFFICERS RESPONSIBLE FOR POLICY, AND ARE NOT THEREFORE USUALLY IN A POSITION TO RESPOND AUTHORITATIVELY
ON MATTERS OF POLICY.
SIR,
THE REPORT IS A THOROUGH AND HIGLY PROFESSIONAL PIECE OF WORK. THE POINT MAKE IS OUT OF PRINCIPLE REGARDING THE PROCEDURES TO BE USED FOR DISCUSSION OF POLICY ISSUES RAISED BY THE REPORT: BUT LET ME, AT THE SAME TIME, ASSURE MEMBERS OF THIS COUNCIL THE GOVERNMENT WILL ANSWER ALL THE POINTS RAISED IN IT.''
PRESS COMMENT
5. WHILE THE PRESS ACCORDED SOME PROMINENCE TO THE DIRECTOR OF AUDIT'S REPORT ON THE DAY FOLLOWING PUBLICATION, IT HAS NOT YET
BECOME THE MEDIA ISSUE WHICH MIGHT HAVE BEEN ANTICIPATED. THIS IS
BECAUSE OTHER ISSUES NOTABLY HOUSING (HKG/GT/110) AND MR XU JIA-
TUN'S REMARKS ON THE SUBJECT OF POLITICAL REFORM HAVE CAPTURED THE HEADLINES. NEVERTHELESS MEDIA ATTENTION MAY REFOCUS ON THE ISSUE FOLLOWING THE PUBLIC HEARINGS AND THE PUBLICATION ON 5 FEBRUARY
1986 OF THE PUBLIC ACCOUNTS COMMITTEE'S REPORT.
LINE TO TAKE
6. AS IN C.S.' STATEMENT. ADDITIONALLY THERE SHOULD BE NO QUESTIONA ING OF THE LEGALITY OF THE REPORT. IF ASKED ABOUT THIS
YOU SHOULD SAY THAT THE QUESTION OF THE BOUNDARIES OF THE
DIRECTOR'S POWERS RAISES MANY DIFFICULT ISSUES TO WHICH THERE
ARE NO EASY ANSWERS.
YOUDE
LIMITED HKD
MR WILSON
CON=3
COPIES TO:
HKGO,
LONDON
CONFIDENTIAL