TNAG-1415-FCO40-1896-Public-finance-in-Hong-Kong-1985 — Page 185

178.

My review of selected items from the office expenditure budget which forms 20% of the Trade Development Council's overall budget has indicated weaknesses in the system of internal control and a lack of an adequate monitoring procedure over levels of expenditure. According to the Council's own instructions, Council staff of manager status may entertain visitors or local residents connected with the Council's activities, provided that the guests do not include an undue proportion of colleagues or personal friends. Claims for reimbursement should indicate the purpose of the entertainment. In 1984 the prescribed rates per person for entertainment were not to exceed $60, $120 and $160 for cocktail reception, lunch and dinner respectively.

179.

My review has revealed three instances where functions were held exclusively for staff of the Trade Development Council and in two of these the cost per head was more than double the rates prescribed for official guests. The rates were often ignored when providing entertainment to official guests and some claims were unsubstantiated by details of the purpose of the entertainment. I have also noticed that overseas-based staff who were in receipt of daily boarding allowances whilst making duty visits to Hong Kong were entertained at the Council's expense. In an internal exercise conducted in 1982 the Council found that during the period from January to June 1982, 23 out of 27 staff were entertained whilst receiving daily boarding allowances and that one officer had received 60 free meals through official entertainment, in addition to the 150 meals for which he received a boarding allowance. No remedial action was apparently taken on conclusion of the exercise. response to my findings, the Executive Director of the Council has informed me that more clear-cut guidelines on entertainment expenses have been issued and all staff of the Council must abide by these rules.

180.

A further instance of lack of cost-consciousness was the Trade Development Council's expenditure on facsimiles for the transmission of information throughout its network of local and overseas offices. Although the Council's instructions stipulate that only urgent requirements should be transmitted by means of facsimile, the audit review indicated that 20% of the facsimiles could have been transmitted by cheaper means without affecting operational efficiency. The contents of some of the messages transmitted were unrelated to the activities of the Council and included newspaper cartoons, office lampoons, newspaper cuttings relating to out-of-date events and a favourite recipe. The Executive Director of the Council has informed me that rules for the use of facsimile have been drawn up to make sure that only essential messages are transmitted through this facility.