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Following is the speech by the Acting Chief Secretary for Administration, Mr Michael Suen, in tabling the Government Minutes in response to the Report No. 30 & 31 of the Public Accounts Committee in the Legislative Council today (Wednesday):

Madam President,

Laid on the table today are two Government Minutes responding to Reports No. 30 and 31 of the Public Accounts Committee (PAC). These Minutes set out the measures the Government is taking on the conclusions and recommendations contained in the Reports.

As is its usual practice, the Committee has selected for detailed study a total of 15 subjects investigated by the Director of Audit in his two Value For Money Reports. The Committees conclusions and recommendations on 13 of them are contained in the PAC Reports published. The Administration will continue to offer its fullest co-operation to PAC in its deliberations on the remaining two. Indeed, for the other nine subjects not selected for detailed study by PAC, the relevant bureaux and departments have followed up the Director of Audits recommendations and make regular progress reports. Finance Bureau will monitor and co-ordinate half-yearly progress reports on these subjects and share these with the Director of Audit for any further investigation, if necessary. I wish to reassure Members that through this reporting system, every recommendation to improve the use of public resources brought to the Administrations attention will be vigorously pursued.

The Honourable Eric Li, Chairman of the Public Accounts Committee, spoke in this Council on 10 February when tabling the Committees Reports. His speech touched on three general themes. I would like to respond to them in turn.

The first area concerns the economical and efficient use of staff resources in the Civil Service. Members of this Council spoke passionately on this subject at the Motion Debate on Civil Services culture and efficiency moved by Mr Li on 10 March. We share Members expectations that the Civil Service should do more with less and should strive for a better management culture especially at a time when the private sector is going through a painful adjustment process to cope with the severe downturn in the economy. Our commitment is well demonstrated in the proposed reform of the Civil Service on which we are now consulting staff.

We commented at length on the subject of Civil Service culture and efficiency during the Motion Debate on 10 March. The Secretary for the Civil Service in unveiling the civil service reform proposals has elaborated on the principles, objectives and scope of the reform. I do not propose to repeat them here this afternoon. I would however like to respond to a few specific areas highlighted in PACs Reports.

The Director of Audit and his team have uncovered inadequacies in the monitoring and management of outdoor staff in three departments in his Report No. 31. As reported in the Government Minute, the concerned Heads of Department have all taken appropriate follow-up action to discipline staff involved where warranted, ensure effective measures are in place to monitor performance of outdoor staff, and review and redeploy staff resources in the light of changing needs.

We share PAC's views that same problems in the monitoring of outdoor staff may exist in other departments. Our response, therefore, is not confined to the three concerned departments. We have taken immediate action to investigate supervision of outdoor staff on a service-wide basis. All Heads of Department have been asked to undertake a comprehensive review on their existing system to monitor outdoor staff. I am pleased to report that all Departments have completed the review and in all cases, they have reported that adequate supervisory systems are in place. Nonetheless, arising from this exercise, many Heads of Department have affirmed the need to continuously update the management systems with the aid of the most up-to-date electronic devices and additional measures or revised rules. The Civil Service Bureau has studied the results of the review and is drawing up a set of up-to-date guidelines to ensure consistent standards of supervision of staff on outdoor duties in all Departments.

We understand that to improve the use of scarce public resources requires a multi-pronged approach. Members have heard a great deal in recent months about the progress of the Enhanced Productivity Programme announced by the Chief Executive in his 1998 Policy Address. The Financial Secretary has outlined in his 1999 Budget Speech further measures to improve the delivery of public service. In the official response to the Budget Debate in this Council on 31 March, we have pledged that we would explore all means to achieve the objective. On that day, the Chief Secretary for Administration specifically mentioned that the Government would take effective measures in outsourcing, corporatisation and changing the subvention practices. All these efforts will only bear fruit with the support of Members of this Council. And I look forward to our maintaining a useful and constructive dialogue with the Legislative Council on this in the months ahead.

Mr Li also referred to the importance of planning in the use of Government land and property. He has urged that the Property Strategy Group should take a proactive role in the relocation of the General Post Office. I can assure Members that the Administration attaches great importance to optimising the use of sites occupied or reserved for Government, Institution and Community (GIC) purposes. The case of the General Post Office illustrates the complexities of relocating a public facility when replacement sites were not readily available in the light of planning and development constraints. Since November 1997, the Secretary for the Treasury has personally chaired the Property Strategy Group to ensure that decisions are taken at a senior level and in a concerted manner, and to provide policy direction on all site-utilisation matters. The Administration has so far identified a total of 68 GIC sites, with a total area of about 100 hectares, which can be released for redevelopment over the next five years. In addition, the Government Property Agency is compiling a comprehensive computerised database on all GIC sites, which should be completed by end 1999.

In line with PACs recommendations, we are vigorously pursuing a review on canteens in Government premises. As a result, we have already decided to close three canteens in joint-user Government office buildings in Wan Chai. We are assessing the continued need of the remaining 117 canteens. Where their continued operation is not justified, we will close them and turn the surplus space into office and related uses. Those canteens which are required to be retained on operational grounds will be subject to strict control and management. The whole review is expected to be completed in the middle of this year. We will keep PAC informed.

Finally, Mr Li commented on the accountability of the Administration to the Legislative Council on the use of funds, a recurring theme in PACs deliberations. Over the years, the Administration has established and reinforced our partnership with the Legislature in pursuing our common objective of efficient use of public funds. On several past occasions in presenting the Government Minute, we have reassured Members that we attach the utmost importance to the principles of legislative control of public finance and public accountability. We have improved the substance and presentation of information in submissions to the Finance Committee to allow the Committee to make informed decisions. We have a system to monitor all outstanding action on the Administration arising from discussions at the Finance Committee and its subcommittees. However, on occasions, with the best of intentions, oversights do occur. This is what has happened regarding the construction of the Extension to the Hong Kong Convention and Exhibition Centre. Arising from this, the Secretary for the Treasury has undertaken that for major Government projects the Administration will take the initiative to keep the Finance Committee informed of significant slippage, cost overruns or other major departure from the funding submissions.

In connection with the issue of accountability of the Government, Mr Li suggested that the Administration should review the financial accounting practices with a view to enhancing timely disclosure of information for scrutiny by the Legislative Council and legislators. In speaking during the 1999 Budget Debate on 24 March, Mr Li elaborated on those areas in the current public finance accounting system where he feels a review is needed. The Administration is conscious of the need to ensure that the accounts of the Government are presented in a way that best meets the changing demands. In 1994 we conducted a review of the Government financial reporting but concluded at the time that it was premature for the Government to go for private sector type of full accrual accounting. However, we agree that it is timely to take another look at the issue again. I am pleased to inform Members that the job is hand under the steer of a task force chaired by the Secretary for the Treasury.

Madam President, as we are approaching the Year 2000, Members are rightly concerned about the progress of Y2K compliance work both within Government and by essential service providers. We have detailed in the Government Minute the comprehensive measures we have taken and the close monitoring put in place under the Secretary for Information Technology and Broadcasting. We are happy to report progress to PAC in the middle of this year.

I wish to express my sincere thanks to the Chairman and Members of PAC for their valuable work and comments. The Administration will continue to co-operate fully with the Committee.

End/Wednesday, May 5, 1999

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