trict Land Offices, fully implemented. The Committee are encouraged by the positive response of the Director of ldings and Lands and the Director of Accounting Services to what was a worrying situation. The Committee now wish to know when the overhaul of the file movement system in the four urban District Land Offices will be completed.
3.49 The current arrangements for funding the Police Welfare Fund and the Fire Services Department Welfare Fund and the improper crediting of $7.2 million to the Police Welfare Fund. (Paragraphs 7.68-7.73 of P.A.C. Report No. 8). The Commissioner of Police, with effect from 1 June 1986, ceased temporarily to deploy members of the Auxiliary Police Force on hire of Police services. In addition to the $7.2 million improperly credited to the Police Welfare Fund for the hire of Auxiliaries up to 31 March 1985, a further sum of $0.82 million for the period 1 April 1985 to 31 May 1986 must be added. The write-off of these amounts is presently under consideration.
3.50 The Secretary of Security is discussing with the Deputy Financial Secretary a proposal to seek the Executive Council's advice on the appropriate manner for financing the Police Welfare Fund and the Fire Services Department Welfare Fund in future. The Committee wish to be informed of the progress on this subject.
The accumulation of unexpended subventions in the hands of voluntary organizations under the standard cost subvention system. (Paragraphs 7.74–7.83 of P.A.C. Report No. 8). The Committee wish to be informed of the pro- gress on:
the critical examination of methods for determining standard costs so that they provide an accurate rather than a rough and ready measure;
the investigation of a clawback system for recovering any overpayment of the salary element of the subvention; and
the recovery and use of subvention surpluses (the Committee understand that surpluses accumulated in agencies' reserve accounts up to and including 1984–85 have been identified at $38.7 million).
3.52 Overpayments of subventions to non-profit-making day nurseries arising from the granting of an automatic 5% subvention. (Paragraphs 7.84-7.86 of P.A.C. Report No. 8). The Committee understand that the Director of Social Welfare will review the present system of granting an automatic 5% subvention to non-profit-making day nurseries at the end of 1986–87. The Committee wish to be informed of the outcome of this review.
3.53 Delays in the fitting out of welfare premises in public housing estates. (Paragraphs 7.87-7.93 of P.A.C. Report No. 8). Progress has been made in the establishment of fitting-out standards and the entrustment of new projects within housing estates yet to be constructed to the Housing Department's main contractors. The Committee wish to be kept informed of the progress in:
the establishment of standards for the 'core' services in all types of public housing estates; and
the completion of the fitting-out of the remainder of the vacant premises in housing estates that have already been constructed.
3.54 The need to carry out periodic reviews to see if the universities and polytechnic student finance scheme is being administered as economically as possible whilst meeting the policy objective. (Paragraphs 7.94-7.102 of P.A.C. Report No. 8). Following a review by the Secretary for Education and Manpower the Executive Council will shortly be asked to advise on the future of the student finance scheme including the possibility of a reassessment of the most appropriate balance between grants and loans and the question of charging interest on loans.
3.55 Commendations. Further to paragraphs 3.21-3.22 of the Committee's Eighth Report, the Committee wish to commend the Commissioner of Police for the positive action he has taken to resolve the long standing problem of the loss of property of prisoners in Police custody and of the disappearance of cash and valuables from Police safes. 3.56 Further to paragraph 3.29 of their Eighth Report and to paragraphs 6.82–6.90 of their Seventh Report, the Committee are pleased to note that the arrears of in-patients fees at the Queen Mary Hospital at 30 June 1986 have again been reduced significantly. Following approval by the Computer Committee, pilot hospital information systems will soon be implemented at the Princess Margaret Hospital and South Kwai Chung Polyclinic. One function of the system will be to watchlist those patients who have not previously settled hospital charges. In addition, the Director of Medical and Health Services has proposed to install a computer system for the control and monitoring of outstanding demand note debts. The Committee commend the Director of Medical and Health Services for these initiatives.
4 COMMITTEE PROCEEDINGS-REPORT FOR THE YEAR ENDED 31 MARCH 1986
4.1 The Consideration of the Director of Audit's Report. As in previous years, the Committee did not consider it necessary to investigate in detail every observation contained in the Director of Audit's report and they therefore selected only those paragraphs which, in their view, referred to more serious irregularities or shortcomings. It is the investigation of those paragraphs which constitutes the bulk of this report. The Committee continue to expect, however, that the Government will take appropriate remedial action on the remaining paragraphs of the Director's report. 4.2 Meetings. The Committee held nine meetings, including four public meetings. At the public meetings they heard evidence from a total of 18 Branch Secretaries and Heads of Departments and representatives of a construction company and of a consultancy firm (and their legal advisers) referred to in the Director of Audit's report. The names of the witnesses are listed in Appendix A to this report. A copy of the Chairman's introductory remarks to the public hearings is at Appendix B.
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