TNAG-0453-FCO40-518-Budget-of-Hong-Kong-1974-1975-1975 — Page 27

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Mr Pauncfort

MR Han

PROPOSAL TO AMEND PRESENTATION OF URBAN COUNCIL AND HOUSING AUTHORITY EXPENDITURE AND CERTAIN PROJECT EXPENDITURE IN THE ANNUAL ESTIMATES AND ACCOUNTS

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1. I am much obliged to HKIOD for the further information which has been provided.

2.

It is now clear that both the Urban Council and the Housing Authority are statutory corporations, the governing ordinance in each case (numbers 19 and 23

of 1973 respectively) making full provision for accounts and audit separate from the Hong Kong Government. I therefore see no objection in principle to the proposals at paragraphs 4 and 7 of (29).

3.

At the same time Hong Kong may wish to consider whether their object would be better achieved by using "below the line" accounts, as they suggest, or by the alternative method of crediting the Urban Council and Housing Authority reimbursements to colony

expenditure instead of to revenue. Either method will overcome the problem of inflating revenue and expenditure figures but the latter might be more appropriate in dealing with personal emoluments which, as Hong Kong have pointed out, must continue to be included in the colony estimates.

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4. In any case I suggest that Hong Kong be informed that these proposals are agreed to and that the application of Colonial Regulations 185 and 193 to Hong Kong is modified accordingly to this extent.

5. The proposal at paragraph 10 of (29), that PWD projects financed from other sources as well as revenue should show only the revenue element, is not quite on all fours with the first two proposals, but I suggest it may be agreed to on the understanding that the total cost of each project from all sources will be shown somewhere in the estimates and accounts.

6. HKIOD may wish FCO approval of the proposals to be subject to the concurrence of the Hong Kong Legislature.

知

For

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FEL Carter

27 August 1974

/Mr Rushford