4.3 The Arrangement of the Report. The evidence of the witnesses who appeared before the Committee and Committee's specific conclusions and recommendations, based on that evidence and on their deliberations on the relevant paragraphs of the Director of Audit's report, are set out below in three sections, entitled Government Secretariat, Government Departments and General Conclusions and Recommendations. The paragraph numbers quoted refer to paragraphs in the Director of Audit's report. An index by subject is also provided.
4.4 For the first time a verbatim transcript of the Committee's public proceedings has been prepared. This is published in the English language together with the Committee's report.
4.5 Acknowledgements. The Committee wish to record their appreciation of the co-operative approach adopted by all the persons who were called to give evidence. In addition, the Committee are grateful for the assistance and constructive advice given throughout by the Deputy Financial Secretary and the Director of Accounting Services. The Committee also wish to thank and congratulate the Director of Audit for the objective and professional manner in which he has completed his report and for the many services which he and his staff have rendered to the Committee.
5 GOVERNMENT PAPER ON THE REPORT OF
THE DIRECTOR OF AUDIT FOR THE YEAR ENDED 31 MARCH 1985
5.1 The Director of Audit's powers. (Paragraphs 5.1-5.4 and 8.1-8.2 of the Committee's Eighth Report). The Committee's Eighth Report recorded the Committee's view that whilst the Director of Audit had a remit to examine and report on policy implementation, the boundaries of that remit, particularly in relation to value for money studies, had not been clearly defined. The Committee recommended that early action be taken to resolve this grey area.
5.2 Following discussions between the Committee, the Attorney General and the Director of Audit, guidelines on the conduct of value for money studies have been agreed between the Public Accounts Committee and the Director of Audit. They have also been warmly supported by the Administration. The guidelines were laid on the table of the Legislative Council on 19 November 1986 in a paper entitled 'Scope of Government Audit in Hong Kong-“Value for Money" Studies'. A copy of this paper together with the accompanying speech by the Chairman of the Public Accounts Committee and the statement by the Acting Chief Secretary are attached at Appendices C, D and E respectively.
5.3 The time tabling of the Public Accounts Committee's cycle. (Paragraphs 8.3–8.4 of P.A.C. Report No. 8). The Committee's Eighth Report concluded and recommended as follows—
'8.3 The present arrangements involve a single report by the Director of Audit to which the Public Accounts Committee must respond with its report within three months. Given the need for writing, editing, translating, and printing the Committee's Report within this period and the fact of weekly sittings of the Legislative Council, the Committee have very little time in which to hold their public hearings and come to their conclusions. This puts a considerable burden on members of the Committee, not to mention their Secretariat, and the resultant danger is that the Committee may not have the time in which to give matters the detailed scrutiny they deserve. The Committee therefore consider there would be merit in splitting its annual cycle into two phases each involving the examination of reports by the Director of Audit and a subsequent response by the Committee.
8.4 The Committee understand that it would take at least two years for the Director of Audit to reorganize the Audit Department to cope with such an alteration in the Committee's procedures. Meanwhile, the Committee recommend that consideration should be given to the need for amendments to the Audit Ordinance in order to accommodate such a change.'
Action on this recommendation was deferred pending the outcome of the review of the Director of Audit's powers in relation to value for money studies (see paragraphs 5.1 and 5.2 above).
5.4 Following resolution of the problem of the Director of Audit's powers:
the Director of Audit, the Attorney General and the Secretary of the Public Accounts Committee have held preliminary discussions to determine whether amendments to the Audit Ordinance and the Standing Orders of the Legislative Council are required in order to accommodate such a change; and
the Director of Audit has had policy support for the provision of the additional staff which he requires to service a split in the annual cycle of the Public Accounts Committee into two phases. This could start in 1988 subject to the processes of justification, approval and appropriation.
6 GOVERNMENT SECRETARIAT
ADMINISTRATIVE SERVICES AND INFORMATION BRANCH
6.1 Paragraphs 48–52. Inadequacy of disaster recovery planning for Government computer installations. The Secretary for Administrative Services and Information told the Committee that in November 1986 the Chief Secretary's Committee had endorsed a disaster recovery plan. Out of the 54 computer systems in the Government, 48 had been identified as being critical and requiring back-up facilities. Such facilities would be provided in two mainframe computers separately located. The estimated capital cost was $32.6 million and the recurrent costs would be $11.3 million. The Finance Committee of the Legislative Council would be invited to approve these sums in December 1986. It was hoped that the full back-up would be operational by mid-1988.
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