LANDS DEPARTMENT
7.45 Paragraphs 25–35. Full-scale review of the procedures relating to the assessment and collection of revenue from properties and investments, land transactions and connected fees and charges, for which the Director of Lands is responsible (and including the Mass Transit Office of the Engineering Development Department), with a view to establishing a sound system of internal control and to issuing a manual of guidance for officers concerned with each step of the procedures; and four new cases of under-collection totalling $2 million because of mistakes. The Committee invited the Director of Lands to comment on the observations made by the Director of Audit.
7.46 On the revenue collection procedures, the Director of Lands told the Committee of the progress in the implementation of the recommendations. An exercise to introduce a checklist in each case file had been completed. Standardization of the periodic demand note raising register and the mechanization of the demand note preparation procedures had been completed for both the Lands Department Headquarters and the District Lands Offices. This followed the computerization of the demand note and revenue collection systems in these offices incorporating revised forms of stationery. A uniform review system had been introduced with new review registers and review pages in all files. On the documentation of accounting procedures, a draft manual of accounting procedures had been sent to the Director of Accounting Services and the Director of Audit for their comments and was expected to be completed by February 1986. Recommendations concerning the introduction of a tabular interest reckoner and the use of the duplicate copy of the demand note as a first reminder had not been pursued because the work could now be done by computer. Eight staff had been working on the overhaul of the file movement system and the exercise had been completed in three District Lands Offices and was in progress in two other District Lands Offices. It was expected that the whole exercise would be completed by mid-1986. The review of the Crown rent collection system had been expanded to include the collection of other small miscellaneous sums due, including those from short term tenancies and Crown land licences; the review was expected to be completed by 1 April 1986. It was hoped to devise a system which would obviate the collection of these uneconomic amounts in future.
7.47 On the timing of the implementation of all the recommendations on revenue collection procedures, the Director of Lands said that work should be completed by about September 1986. The Director of Accounting Services remarked that he was satisfied with the progress although he had not yet completed his examination of the draft manual of accounting procedures. He expected to approve this in about January 1986, although in fact these procedures were already being followed by the Lands Department.
7.48 On the review of assessment procedures, the Director of Lands said that he had not made as much progress as he would have liked, largely due to the lack, until recently, of an experienced Senior Estate Surveyor to do the work. This was due to several factors including the setting up of the Land Commission which resulted in amendments to procedures and the need to collect large amounts of data, the computerization of District Lands Offices and officers employed on contract terms leaving the service. Nevertheless progress had been made in the implementation of the recommendations. The land instructions covering the assessment procedures had been kept under review. Amendments to procedures had been made and amendment sheets issued on an on-going basis, with the time gap between the issue of technical circulars and the issue of land instructions being reduced in most cases to not more than one month. A new system of offer letters and new procedures for checking valuations had also been introduced.
7.49 The Director of Lands said that outstanding work included the consolidation and rationalization of the procedures, the introduction of amended procedures on review registers and an improved index. The Director remarked that the current problem was not so much of a lack of procedures and instructions, but one of ensuring that the instructions were understood and applied uniformly in the various District Lands Offices. To this end a Senior Estate Surveyor (Training) would be appointed early in 1986 whose duties would include arranging seminars on important new land instructions, visiting District Lands Offices to ensure that the land instructions were being followed, and checking with the Estate Surveyors on what training was needed. The Director hoped that with this officer in post, the implementation of all the recommendations on revenue assessment procedures would be completed by April 1986, six months behind the original time schedule.
7.50 On the specific question of the undercollection of $2 million, the Director of Lands said that the four cases all referred to monetized Letters B. He explained that when the monetization system was introduced, he had realized that it would be extremely difficult to run. The Letters B system, which had been in operation for over 23 years was very complex, and had not been designed for monetization. Because of this, a very comprehensive instruction, which had been cleared with the Director of Accounting Services and the Director of Audit, had been issued and a provision had fortunately been incorporated into the system to enable any amount underassessed to be recovered. In all four cases referred to by the Director of Audit the undercollection was caused by a misinterpretation of the operative date of individual Letters B. This varied from Letter B to Letter B and could be the date of the Letter B or the date of surrender or reversion of the land detailed in the Letter B. This could only be verified by checking the actual document itself and by checking back to the records.
7.51
The Director of Lands told the Committee that demand notes for the amounts undercollected had been issued and had been settled. However in one case, although the demand note had been paid, there had been an appeal which claimed that the definition of the operative date by the Director of Lands and the Director of Audit was wrong. He thought that the amount involved in this case was about $278,000 but if the appeal went through it would affect the other cases. The Director said that he was seeking legal advice on this matter.
7.52 The Committee asked what had been done to ensure that the instructions were clearly understood in future. The Director of Lands said that a technical circular had been issued in October 1985. The Director stated that he had informed the Director of Audit of the remedial action taken.
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