policy exists, when it was last reviewed, and whether it is still thought to be valid. During 1985, Members studied information papers on the development of temporary housing areas and improvements to squatter areas-1983-84, proposed improvement on Kennedy Road, street lighting and New Towns development programmes. Membership of the Sub- Committee is reported at Appendix IV.
Public Accounts Committee
The Public Accounts Committee was established by Resolution of LegCo on 10.5.78. It is a standing committee responsible for considering the report of the Director of Audit on the accounts of the Government and, where necessary, to call for explanations from those responsible, mainly public officers, on matters referred to in the report. The Committee consists of a chairman and six members, all of whom are Unofficial Members nominated by the President of Leg Co. The membership of the Committee for the 1984/85 session is at Appendix IV.
During the year, the Committee held eight meetings, including five public meetings at which evidence from a total of 18 branch secretaries and heads of departments was heard. The conclusions and recommendations of these hearings were contained in the Seventh Report of the Public Accounts Committee which was tabled in LegCo on 23.1.85. Following amendments to LegCo Standing Orders in 1984, meetings of the Public Accounts Committee, hitherto held in private, have at the Chairman's discretion been open to the public.
Mr S L CHEN, Chairman of the Committee, made a statement when the Committee's Report was laid before LegCo on 23.1.85. He urged the Government to set up a training scheme whereby all officers rising to directorate rank in the civil service would be required to go through a course in financial management. He suggested that the course should outline the essentials of the Government's budgetary system, teach staff the basic principles of cost accounting and management accounting, and give them a firm grasp of the essential principles of financial control, financial forecasting and financial modelling.
Instead of investigating in detail every observation contained in the Director of Audit's report, the Committee confined its attention to the
more serious irregularities and shortcomings reported.
The response of the Administration to the comments of the Committee was contained in the Government Minute laid before LegCo on 13.3.85. Some of the measures adopted by the Administration in response to the Committee's comments and recommendations were:
(i) Arrears of revenue relating to earnings and profits tax
The Commissioner of Inland Revenue included in the 1985-86 Draft Estimate provisions for a net addition of 41 posts for the sections dealing with tax assessments, appeals and collection of arrears of revenue. Furthermore, a number of office mechanisation systems were introduced and legislative changes were made. These measures helped to reduce the arrears in revenue from $1,113 million in June 1984 to approximately $612 million in September 1985.
(ii) Delays in the opening of the Aberdeen and Airport Tunnels The Director of Audit drew attention to the delays in the opening of the Aberdeen and Airport Tunnels which had resulted in substantial financial losses to the Government. The main reason for the delays was difficulty with the development of the software of the computer systems designed for traffic surveillance and control. Following recommendations by the Committee, the Director of Engineering Development took action to rectify defects in the computer systems and to complete these in accordance with the specifications. Departmental instructions to prevent a repetition were issued also in accordance with recommendations made by the Committee.
(iii) Failure of the Government to implement its policy on fee-charging at the Tung Wah Group of Hospitals The Director of Audit pointed out that the Government had failed to implement its policy on fee-charging at the Tung Wah Group of Hospitals. In response to the Committee's comments, the Administration sought the advice of the Executive Council on whether the Tung Wah Group of Hospitals should be expected to bring its fee-charging policy into line with the Government's policy on hospital and clinic charges. The matter is still being actively considered.
(iv) Hong Kong Polytechnic-Staff medical benefits
The Director of Audit pointed out that in a sample check of medical bills incurred in 1983-84 by staff of the Hong Kong Polytechnic the average cost per consultancy had been $150, whereas quotations received from group medical practices suggested that substantial savings could have been achieved if the Hong Kong Polytechnic had adopted such a system. In the light of the Committee's comments, the Polytechnic's Ad Hoc Committee on Medical Benefits was asked to examine the possibility of replacing the present medical scheme for its staff. As a result, a modified private insurance scheme was later introduced.
(v) Mismanagement of the arrangements for the procurement of dental enquipment for the Prince Philip Dental Hospital
The Director of Audit revealed that a substantial portion of the dental equipment supplied to the Prince Philip Hospital was defective due to weaknesses in contract management. In response to the comments made by the Committee, the Administration conducted investigation into the handling of the contract. The findings were accepted by the Government and measures were taken to prevent a repetition.
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