41. Non-assessment to rates of market stalls in the temporary wholesale markets of the Agriculture and Fisheries Department. In July 1985 I invited attention to the delay in assessing to rates the Cheung Sha Wan and the Western Temary Wholesale Markets which are managed by the Agriculture and Fisheries Department. The Commissioner of Rath and Valuation informed me that he intended to issue Notices of Interim Valuation to the ratepayers at the end of December 1985. However, because this represented another increase in charges soon after the traders had agreed to increased rents payable with effect from February 1986, the Director of Agriculture and Fisheries suggested that the Notices of Interim Valuation should not be issued until June 1986. The Secretary for Economic Services and the Deputy Financial Secretary supported this proposal but in June 1986, when this matter was again discussed, it was agreed that the market stalls in these temporary markets should be treated in the same way as the market stalls of the Urban and Regional Councils regarding the timing of charging rates. The estimated loss to the revenue by not rating the premises is $580,000 a year.
42. Head 11- Fees and Charges. Subhead 170. Social Welfare Department - (020). Others. An audit review of the fees and charges collected by the Social Welfare Department revealed unreasonable delays in increasing two items of fees and charges and I have estimated that as a result revenue amounting to $840,000 has been forgone.
43. In providing housing for the elderly, the Social Welfare Department was required to fix its charges for single persons at 20% above the level of those for self-care hostels operated by voluntary agencies, the higher charges being justified by the higher standard of accommodation provided. The charges for the voluntary agencies' self-care hostels are in turn linked to the rates of payment under the Public Assistance Scheme and when these payments are revised the charges are automatically adjusted. Following the raising of the rates of payment under the Public Assistance Scheme in February 1984, the monthly charges for the self-care hostels were increased from $156 to $218 a person. The monthly charges for the Social Welfare Department's Housing for the Elderly Scheme should have been raised at this time also, from $185 to $260 a person, in accordance with the policy linking these charges with those of the self-care hostels but it was not until nearly two years later, in January 1986, that the charges were actually raised to this level. The Director of Social Welfare has explained that the charges were not raised in early 1984 because the first residents of the Housing for the Elderly Scheme had moved into their accommodation only in August 1983 and it was not considered appropriate to raise the charges after only six months. Therefore, it was decided to defer any increase until the next revision of charges which was expected in June 1985. In the event the revision did not take place but on the advice of the Deputy Financial Secretary the charges were increased and came into effect in January 1986.
44.
The guardian ad litem fee (adoption fee) was last increased on 1 January 1978 to $500 a case. This was a nominal fee set well below the cost to the Social Welfare Department of handling a case. The fee has not been increased since 1978, mainly because of a failure to decide on a policy for determining the fee level. In June 1980 a working party had recommended that a higher fee should be charged, linking it to the cost of providing the service, but the recommendation was ambiguous and it was not clear whether the intention was to recover the full cost or a percentage of the cost. In March 1981 the cost of handling each adoption case was $2,900 and although the raising of the fee has been under consideration since then, the matter has not been concluded. Accordingly, I have recommended to the Director of Social Welfare that, in the event of it not being possible to deal with the matter with a greater degree of urgency, the adoption fee should be raised on an interim basis pending the outcome of the final decision on the fee policy. The Director of Social Welfare has explained that it was not unreasonable to take a cautious approach to revising the adoption fee upwards so as not to discourage adoption. However, she had been searching for a rational basis for future revisions and a fresh proposal was being considered by the Government Secretariat.
EXPENDITURE
45. Cost-benefit analysis of potential Government computer systems. The procedures governing the application for the development of a computer system specify that approval from the Computer Committee is required for proceeding to each of the three stages of the system development process namely, project definition study, system specification and design, and finally implementation. The project definition study is concerned with confirming, or otherwise, that an application for a computer system is justified on the basis of a preliminary study and a rudimentary cost-benefit analysis, while the system specification and design stage covers the drawing up of the specification of the system functions and design. The final stage of implementation involves the writing and testing of computer programs and commissioning of equipment before the system is put into full operation.
46. A recent audit review of the system development of a proposed computerized information system for the Independent Commission Against Corruption, which was estimated to cost $65 million over a period of seven years, revealed that the project definition study calculated that a net cumulative benefit of $16 million would be derived from computerization. However, in the cost-benefit analysis, because the calculation of the additional benefits to be derived from the proposed system wrongly included a benefit already accruing to the existing system amounting to $21 million, the correct analysis would have shown a net cumulative cost of $5 million. The same mistake was made in the cost-benefit analysis in the system specification and design report which showed a net cumulative benefit of $17 million seven years after implementation instead of a net cumulative cost of $13 million. Approval was given by the Computer Committee in June 1984 for the project to proceed to the implementation stage and it would have been implemented on this basis had it not been rejected in late 1984 by the Deputy Financial Secretary owing to financial stringency. I understand that the scope of the project is now being modified with a view to reducing the project cost.
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