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HONG KONG URBAN COUNCIL
85
In addition to the foregoing General Revenue Balance, the Council has three other reserve funds, namely: General Reserve Fund, Capital Projects Reserve Fund and the Museums Acquisition Reserve Fund. The purpose and regulation of these funds are in accordance with Financial By-laws 14, 15 and 16 of the Urban Council respectively.
The General Reserve Fund was created in 1973/74, the Capital Projects Reserve Fund was created in 1975/76 and the Museums Acquisition Reserve Fund was created in 1981/82.
Any interest arising from the Museums Acquisition Reserve Fund will be credited to this account. The other reserve funds are treated together for banking purpose and also earn interest.
All surplus funds of the Urban Council are placed on call or fixed deposit with licensed banks in Hong Kong under the direction of the Finance Investment Panel, a Sub-committee of the Urban Council Finance Select Committee.
The answer to the second part is that any annual surplus/deficit since 1973 and transfers to/from the various reserve funds and the General Revenue Balance are set out in the document tabled before Members. (Appendix 1)
The third part asks about the utilisation and policies in respect of the reserve funds. As can be seen from the material tabled, there have indeed been transfers to and from the reserve funds.
The General Revenue Balance is the account into which and from which a surplus or deficit recorded in any one financial year is transferred.
Transfers to and from the reserve funds are carried out in accordance with the delegated authorities as specified in Financial By-laws 14, 15 and 16 of the Urban Council.
The Council has adopted a policy that its reserves/General Revenue Balance shall be equivalent at all times to about 3 months' expenditure. This objective has been achieved for many years.
The fourth part concerns the rate of investment return and the treatment in the accounts of such revenue. The Council has received interest from its surplus funds of $144.65 million and $205.79 million for the financial years 1994/95 and 1995/96 respectively, and the average annual rate of return was 6.2% and 7.5% respectively.
The interest generated from surplus funds is credited to the general revenue of the Urban Council, with the exception of the interest from the Museums Acquisition Reserve Fund which is credited to this reserve fund in accordance with Financial By-law 16(1)(c).
The Urban Council's Investment Panel has decided to place all surplus funds not immediately required with banks licensed under the Banking Ordinance on
Page 88 of 498
Page 88 of 498
Page 88 of 498
Page 88 of 498
HONG KONG URBAN COUNCIL
85
In addition to the foregoing General Revenue Balance, the Council has three other reserve funds, namely: General Reserve Fund, Capital Projects Reserve Fund and the Muscums Acquisition Reserve Fund. The purpose and regulation of these funds are in accordance with Financial By-laws 14, 15 and 16 of the Urban Council respectively.
The General Reserve Fund was created in 1973/74, the Capital Projects Reserve Fund was created in 1975/76 and the Museums Acquisition Reserve Fund was created in 1981/82.
Any interest arising from the Museums Acquisition Reserve Fund will be credited to this account. The other reserve funds are treated together for banking purpose and also earn interest.
All surplus funds of the Urban Council are placed on call or fixed deposit with licensed banks in Hong Kong under the direction of the Finance Investment Panel, a Sub-committee of the Urban Council Finance Select Committee.
The answer to the second part is that any annual surplus/deficit since 1973 and transfers to/from the various reserve funds and the General Revenue Balance are set out in the document tabled before Members. (Appendix 1)
The third part asks about the utilisation and policies in respect of the reserve funds. As can be seen from the material tabled, there have indeed been transfers to and from the reserve funds.
The General Revenue Balance is the account into which and from which a surplus or deficit recorded in any one financial year is transferred.
Transfers to and from the reserve funds are carried out in accordance with the delegated authorities as specified in Financial By-laws 14, 15 and 16 of the Urban Council.
The Council has adopted a policy that its reserves/General Revenue Balance shall be equivalent at all times to about 3 months' expenditure. This objective has been achieved for many years.
The fourth part concerns the rate of investment return and the treatment in the accounts of such revenue. The Council has received interest from its surplus funds of $144.65 million and $205.79 million for the financial years 1994/95 and 1995/96 respectively, and the average annual rate of return was 6.2% and 7.5% respectively.
The interest generated from surplus funds is credited to the general revenue of the Urban Council, with the exception of the interest from the Museums Acquisition Reserve Fund which is credited to this reserve fund in accordance with Financial By-law 16(1)(c).
The Urban Council's Investment Panel has decided to place all surplus funds not immediately required with banks licensed under the Banking Ordinance on
Page 88 of 498
Page 88 of 498
Page 88 of 498-
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