TNAG-0316-FCO40-352-Reform-of-local-government-of-Hong-Kong-1971 — Page 147

CONFIDENTIAL

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Controls

17.

The aim is to give the Urban Council as much financial freedom as possible, the level of its expenditure being determined in the long run by its readiness to apply for a higher rate in the face of public reactions to such rate increases. Procedural controls will be kept to the minimum,

as follows :

(1).

(2)

(3)

(4)

:

a new accounting systen would have to be introduced, to the satisfaction of the Accountant General and Director of Audit, and this system would aim to give a clear picture of the total cost of various services. It is envisaged that the existing system of Government accounting would continue (with appropriate modifications) to be used in the transitional period, and that the Urban Council would operate a shadow Finance Committee systen in the last six months or so before the beginning of

Year One.

the Urban Council annual budget would be in a form approved by the Legislative Council, with such details as it may require. In principle, the budget should be in the same detail as the annual estimates.

the Urban Council's accounts would be subject to audit by the Director of Audit (in Britain most Local Authority accounts are audited by officers appointed by but independent of the central Government). the Urban Council would each year present its budget and building and works programme to the Colonial : Secretary, together with adequate explanatory memoranda. The Colonial Secretariat would satisfy itself that the proposed expenditure fell within the Urban Council's sphere of responsibility, and the budget would then be submitted to the Legislative Council for approval.

CONFIDENTIAL

/(5).

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