6.43 The Committe note that both the Secretary for Lands and Works and the Deputy Financial Secretary support the principle of charging outside clients for abortive work done in-house by the Architectural Office. Such charging would act as a discipline upon the client, thereby reducing the amount of abortive work performed and making more effective use of the resources of the Architectural Office.
6.44
The Committee recommend that, notwithstanding the lack of clarity of the Memorandum of Administrative Arrangements, where feasible, immediate action should be taken to charge the Urban Council for the full costs of abortive work performed on their behalf by the Architectural Office to date.
6.45 Paragraphs 134-137. Deferment of action in setting out the Government's policies and procedures for the control of subventions. Commenting on paragraphs 134 to 137 of the Director of Audit's report, the Deputy Financial Secretary admitted that the Government had not been able to complete action on all the points raised. He then gave an account of the action taken to date.
6.46
On miscellaneous subventions, the Deputy Financial Secretary stated that draft notes based on the notes on medical subventions had been prepared. In the context of the Finance Branch's examination of the draft estimates for 1986-87 he would examine applications for funds for miscellaneous subventions in the light of the draft notes. This would ascertain the present practice on the administration of the subventions and determine the extent to which the organizations concerned are complying with the notes. Under the miscellaneous subventions head subventions are made to some 37 bodies out of which 16 were annual contributions to various international bodies to whom the guidance notes did not apply.
6.47 As regards medical subventions, the Deputy Financial Secretary stated that the guidance notes on medical subventions prepared in 1971 had been revised in draft and separate notes had been produced for deficiency grant bodies and discretionary grant bodies. The notes on capital subventions to both deficiency grant bodies and discretionary grant bodies had also been rewritten to take account of the new centralized vetting procedures for works projects. As regards social welfare subventions, a discussion paper on the standard cost subvention system had been prepared which would be discussed with the Director of Social Welfare.
As regards guidance notes for auditors, the Deputy Financial Secretary stated that there was already a requirement for organizations to submit annual statements of account together with their budgets. A discussion paper on the main underlying principles was being prepared.
6.49 The Committee asked whether the working party would be reconvened as promised at the public hearing of the Committee held in November 1984. The Deputy Financial Secretary said that the working party, which was set up in 1969 to deal with medical, social welfare and provident fund rules, had been disbanded and had been replaced by the Standing Committee on the Administration of Subventions. The Standing Committee was chaired by the Deputy Financial Secretary and included the Controlling Officers who actually administered the subventions. The Standing Committee had not met last year but now that discussion papers had been prepared on the various subjects he was hoping to have a meeting in January 1986.
6.50 The Deputy Financial Secretary said he could not agree with a comment by the Committee that the lack of meetings and progress indicated that the Finance Branch of the Government Secretariat was taking a casual attitude to the whole subject, given the large amount of Government expenditure involved and the lapse of several years since the subject was first raised by the Director of Audit. The administration of subventions was a very important part of the work of the Finance Branch, in ensuring that public money was properly accounted for and properly utilized. This was a matter of determining priorities and the resources to be devoted towards the work. He informed the Committee that the code of aid for the education sector, which enjoyed the largest share of the Government's subventions, was working well as was the system of subventions to the medical sector. Rules also existed for the social welfare sector. Miscellaneous subventions were the only remaining area for which guidance rules had yet to be drawn up. Finance Branch had now managed to produce notes which were in the process of being tested in the light of working experience. What remained to be done after that was more a matter of fine tuning.
6.51 The Deputy Financial Secretary said that complaints from subvented bodies usually concerned procedures which they thought were too bureaucratic and cumbersome. Although he would try to simplify these it was a question of striking a balance between simplicity and accountability.
6.52 On being asked by the Committee whether there was a firm timetable for bringing the various subjects promptly to a satisfactory conclusion, the Deputy Financial Secretary said that as regards miscellaneous subventions he hoped to conclude the matter in early 1986. As for the others, he did not think there was a perfect solution. The rules would have to be revised from time to time on an on-going basis; for example the results of a current consultancy study would affect the administration of medical subventions.
6.53 Conclusions and Recommendations. The Committee note that it is now 17 years since the matter of the inadequacy of the guidelines on the administration of subventions was first raised by the Director of Audit. The Committee consider this delay to be excessive.
6.54 The Committee are concerned that although some progress has been made in the last year, their recommendations in their Seventh Report that the Standing Committee on the Administration of Subventions should be reconvened and that a timetable should be drawn up for the various tasks have not yet been implemented. However, the Committee note that it is the intention of the Deputy Financial Secretary to reconvene a meeting in January 1986 to consider the outstanding matters. The Committee wish to be informed of the outcome of the Standing Committee's deliberations and of the progress made in implementing the Standing Committee's recommendations.
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