TNAG-1415-FCO40-1896-Public-finance-in-Hong-Kong-1985 — Page 259

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GRS 900

CONFIDENTIAL

FM HONG KONG

CONFIDENTIAL

TOP COPY

TO PRIORITY HONG KONG GOVERNMENT OFFICE LONDON

TELNO 1189

OF 2610OOZ NOVEMBER 85

INFO PRIORITY FCO, UKMIS GENEVA, HONG KONG GOVERNMENT REPRESENTATIVES NEW YORK, BRUSSELS, WASHINGTON, GENEVA.

HKG/GT/111.

DIRECTOR OF AUDIT'S REPORT

HKR 100/4 RECEIVED IN REGISTRY

26 NOV 1985

AB 06

THE DIRECTOR OF AUDIT ON 31 OCTOBER SUBMITTED TO THE GOVERNOR AS PRESIDENT OF THE LEGISLATIVE COUNCIL, THIS ANNUAL REPORT (COPIES TO BE SENT SEPARATELY). ON 20 NOVEMBER IT WAS TABLED IN THE LEGISLATIVE COUNCIL. THE PUBLIC ACCOUNTS COMMITTEE HELD ITS FIRST MEETING ON MONDAY, 25 NOVEMBER.

2. IN ADDITION TO COMMENTING ON MATTERS WHICH FALL WITHIN THE AMBIT OF SECTION 13 OF THE AUDIT ORDINANCE (CHAPTER 122) THE DIRECTOR HAS IN HIS REPORT CRITICISED CERTAIN POLICY DECISIONS, INCLUDING SOME MADE BY THE GOVERNOR IN COUNCIL, THE ROLE OF PUBLIC OFFICERS IN RELATIONS TO THE FORMULATION OF POLICY (SUCH AS THE ADVICE GIVEN TO THE EXECUTIVE COUNCIL BY A BRANCH SECRETARY),

THE DECISIONS OF SUBVENTED ORGANISATION UPON THE

APPROPRIATION OF MONEY IN THEIR CONTROL.

AND

3. THE ATTORNEY GENERAL HAS ADVISED THAT THE DIRECTOR HAS EXCEEDED THE POWERS CONFERRED ON HIM BY THE ORDINANCE. HOWEVER, IT WAS CONSIDERED THAT ANY ATTEMPT IN PRESENT CIRCUMSTANCES TO FRUSTRATE THE NORMAL PROCESS LEADING TO TABLING OF THE REPORT IN LEGCO, EVEN IN RELATION TO ACTS WHICH ARE (NEXT TWO WORDS UNDERLINED) ULTRA VIRES, A PUBLIC QUESTIONAING OF THE LEGALITY OF THE REPORT WOULD BACKFIRE WITH DAMAGING EFFECT.

4. THE USUAL ARRANGEMENTS FOR TABLING AND PUBLISHING WERE THERE- FORE ALLOWED TO PROCEED THOUGH, WITH THE AGREEMENT OF THE CHAIRMAN OF THE PUBLIC ACCOUNTS COMMITTEE, WITH SOME MODIFICATION, AS FOLLOWS: ON THE 20 NOVEMBER SITTING WHEN THE AUDIT REPORT WAS TABLED IN LEGISLATIVE COUNCIL, A GOVERNMENT PAPER WAS ALSO TABLED CONTAINING FULL STATEMENTS FROM THE RESPONSIBLE POLICY SECRETARIES UPON THOSE PARTS OF THE REPORT WHICH COMMENT UPON OR CRITICISE

POLICY DECISIONS AND POLICY ISSUES (COPIES TO BE SENT SEPARATELY).

THE CHIEF SECRETARY MADE A STATEMENT IN COUNCIL AT THE SAME SITTING, EXPLAINING THAT THE GOVERNMENT CONSIDERS THAT POLICY MATTERS FALL MORE APPROPRIATELY TO BE DEALT WITH IN THE COUNCIL

THAN IN THE PUBLIC ACCOUNTS COMMITTEE. THE WOPDING OF HIS

STATEMENT WAS AS FOLLOWS:

CONFIDENTIAL

....

/ "SIR,