TNAG-1642-FCO40-2289-Public-finance-in-Hong-Kong-Supplementary-Appropriation-(198-1987 — Page 63

APPENDIX C

Paper presented to the Legislative Council by the Chairman of the Public Accounts Committee at the sitting on 19 November 1986 on Scope of Government Audit in Hong Kong-

'Value for Money' Studies

Scope of works

The Director of Audit may carry out examinations into the economy, efficiency and effectiveness with which any branch, department, agency, other public body, public office, or audited organization has discharged its functions.

The term 'Audited Organization' shall include:

(i) any person, body corporate or other body whose accounts the Director of Audit is empowered under any

Ordinance to audit;

(ii) any organization which receives more than half its income from public moneys (this should not preclude the Director from carrying out similar examinations in any organization which receives less than half its income from public moneys by virtue of an agreement made as a condition of subvention);

(iii) any organization the accounts and records of which the Director is authorized in writing to audit by the

Governor in the public interest under section 15 of the Audit Ordinance.

This definition of scope of work shall not be construed as entitling the Director of Audit to question the merits of the policy objectives of any branch, department, agency, other public body, public office, or audited organization in respect of which an examination is being carried out or, subject to the following Guidelines, the methods by which such policy objectives have been sought, but he may question the economy, efficiency and effectiveness of the means used to achieve them.

Guidelines

1. The Director of Audit should have great freedom in presenting his reports to the Legislative Council. He may draw attention to any circumstance which comes to his knowledge in the course of audit, and point out its financial implications. Subject to these Guidelines, he will not comment on policy decisions of the Executive and Legislative Councils, save from the point of view of their effect on the public purse.

2.

In the event that the Director of Audit, during the course of carrying out an examination into the implementation of policy objectives, reasonably believes that at the time policy objectives were set and decisions made there may have been a lack of sufficient, relevant and reliable financial and other data available upon which to set such policy objectives or to make such decisions, and that critical underlying assumptions may not have been made explicit, he may carry out an investigation as to whether that belief is well founded. If it appears to be so, he should bring the matter to the attention of the Legislative Council with a view to further inquiry by the Public Accounts Committee. As such an investigation may involve consideration of the methods by which policy objectives have been sought, the Director should, in his report to the Legislative Council on the matter in question, not make any judgment on the issue, but rather present facts upon which the Public Accounts Committee may make inquiry.

The Director of Audit may also,

3.

consider as to whether policy objectives have been determined, and policy decisions taken, with appropriate authority.

4. consider whether there are satisfactory arrangements for considering alternative options in the implementation of

policy, including the identification, selection and evaluation of such options.

5.

6.

7.

8.

consider as to whether established policy aims and objectives have been clearly set out; whether subsequent decisions on the implementation of policy are consistent with the approved aims and objectives, and have been taken with proper authority at the appropriate level; and whether the resultant instructions to staff accord with the approved policy aims and decisions and are clearly understood by those concerned.

consider as to whether there is conflict or potential conflict between different policy aims or objectives, or between the means chosen to implement them.

consider how far, and how effectively, policy aims and objectives have been translated into operational targets and measures of performance and whether the costs of alternative levels of service, etc. have been considered, and are reviewed as costs change.

be entitled to exercise the powers given to him under section 9 of the Audit Ordinance.

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