TNAG-1415-FCO40-1896-Public-finance-in-Hong-Kong-1985 — Page 127

35.

I have invited the attention of the Director of Lands to the errors pointing out that there are weaknesses in the checking procedures for the monetization of Letters A/B. I have requested that prompt action should be taken to recover the undercollections and the accrued interest. I have suggested that in order to prevent a recurrence of similar cases in future, the application form for monetization of Letters A/B should be revised to show clearly a definition of the operative date. I have also suggested that a departmental instruction should be issued to highlight the importance of the operative date in determining the currency value and to remind officers concerned of the need to exercise extreme care in the checking of the operative date. A reply from the Director is awaited but I note that in one of the four cases, immediately after my staff had pointed out the error to the lands staff concerned, a demand note for $228,000 was issued to recover the amount of the deficiency, plus the accrued interest. The demand note has been settled.

36.

Heads 7, 8 and 11 - Revenue from Properties and Investments, Land Transactions and Fees and Charges (Director of Engineering Development). The Public Accounts Committee also recommended in their Sixth Report that the full-scale review of the procedures relating to the assessment and collection of revenue to be conducted by the Director of Accounting Services for the Lands Department (paragraphs 25 to 31 above) should also cover the procedures relating to land matters in the Mass Transit Office of the Engineering Development Department.

37.

The review on revenue collection procedures in the Mass Transit Office was carried out concurrently with that in the Lands Department. A number of common areas where improvements could be made were identified and new procedures designed to strengthen internal control in the Mass Transit Office were implemented in April 1984. These procedures were concerned primarily with preventing the undercollection of revenue as a result of oversight or human error. A copy of the report on the review of the Lands Department revenue collection procedures was passed to the Director of Engineering Development in June 1984 who accepted the recommendations which had relevance to the Mass Transit Office. These recommendations were incorporated in a Mass Transit Office instruction which was issued in September 1984 and draft detailed instructions for the guidance of officers concerned with each step of the procedures relating to revenue collection were subsequently forwarded to the Director of Accounting Services for his comments in June 1985. To date the draft detailed instructions have not been approved by the Director of Accounting Services.