ENG-2008 — Page 65

Constitution and Administration 1 25

The Audit Ordinance, enacted in 1971, provides for the audit of the Government's accounts by the Director of Audit and for the submission of his report to the President of the Legislative Council. The director also audits the accounts of the Exchange Fund, the Hong Kong Housing Authority, five trading funds and more than 60 statutory and non-statutory funds and other public bodies. In addition, the director reviews the financial aspects of the operations of the multifarious government-subvented organisations.

The Director of Audit carries out two types of audit: regularity audits and value- for-money audits. Regularity audits are intended to provide an overall assurance of the general accuracy and propriety of the financial and accounting transactions of the Government and other audited bodies. The Audit Ordinance gives the director statutory authority to conduct regularity audits.

Value-for-money audits are intended to provide independent information, advice. and assurance about the economy, efficiency and effectiveness with which any bureau of the Government Secretariat, department, agency, other public body, public office or audited organisation has discharged its functions. Except for some public organisations where the Director of Audit has obtained statutory authority to conduct value-for-money audits, these audits are carried out according to a set of guidelines tabled in the Provisional Legislative Council by the Chairman of the Public Accounts Committee in 1998.

After the Director of Audit's report has been submitted to the President of the Legislative Council and laid before the council, it is considered by the Public Accounts Committee.

In 2008, the director submitted three reports: one on the audit certification of the Government's accounts for the preceding financial year and two on the results of value-for-money audits (Report No. 50 of March 2008 and Report No. 51 of October 2008).

Report No. 50 contained seven subjects, two of which were selected by the Public Accounts Committee for public hearing:

• Commercialisation and utilisation of government properties; and

• The Society for the Aid and Rehabilitation of Drug Abusers.

Report No. 51 contained 12 subjects, four of which were selected by the Public Accounts Committee for public hearing:

• Administration of the DesignSmart Initiatives;

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• Emergency ambulance service;

• Management of public markets; and

• Reduction and recovery of municipal solid waste.

The value-for-money audit reports attracted considerable public interest. The audit recommendations were accepted by the audited organisations.