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Following is a question by the Hon Wong Ting-kwong and a written reply by the Chief Secretary for Administration, Mrs Carrie Lam, in the Legislative Council today (October 31):
Question:
Regarding the governance of public organizations, will the Government inform this Council:
(a) given that the Audit Commission published in 2009 reports on issues of governance of the Equal Opportunities Commission and the Office of the Privacy Commissioner for Personal Data, how the controlling officers concerned have followed up and implemented the improvement measures recommended in the reports, so as to prevent these organizations from merely "taking the advice without changing the attitude"; of the specific tasks carried out and the work progress;
(b) whether the authorities will revise the arrangements for monitoring public organizations to ensure that the Government has appropriate monitoring authority and is able to help reform the governance structures and management of public organizations; if they will, of the details; if not, the reasons for that; and
(c) whether the authorities will review the long-term positioning and development of public organizations with a view to enhancing their accountability; if they will, of the details; if not, the reasons for that?
Reply:
President,
The Administration's reply to various parts of the question is as follows –
(a) As reported in Government Minutes to the Public Accounts Committee Report in the past, of the 94 recommendations made by the Audit Commission and the Public Accounts Committee in 2009 in respect of the Equal Opportunities Commission (EOC) and the Office of the Privacy Commissioner for Personal Data (PCPD), save for one recommendation on the administrative measure in respect of the EOC for which preparation work is in progress, all have been implemented.
The Administration will continue to monitor the operation and performance of the EOC and PCPD in accordance with the "Memoranda of Administrative Arrangements" signed with the two organizations, through regular progress review meetings and examination of regular progress review reports.
(b) Over the years, the Government has, in the light of actual needs, established different types of public organizations to provide services to the public. The coverage of public organizations is extensive - it includes statutory bodies and non-statutory bodies, be they fully or partially funded by the Government, or relying on fees charged for their services or levies collected under the relevant legislation to provide funding for their operation.
The Government attaches great importance to sound corporate governance and good management practice. Strengthening corporate governance of public organizations will contribute towards the overall efficiency and effectiveness of the public sector, and is an integral part of the Government's initiative to strengthen public sector management. Generally speaking, while respecting the need for public organizations to maintain flexibility in operation and its independence, the Government will consider all relevant factors, such as the objectives of setting up the organizations and the powers conferred on them, and introduce regulatory measures to these organizations where necessary. As for the detailed arrangements, they will be mapped out by the corresponding policy bureaux.
For statutory bodies, generally speaking, there are already specific legal provisions governing their operations in the ordinances that establish these bodies. The means through which the Government monitors the operation of statutory bodies include the following -
(i) requiring a statutory body to submit a proposed programme of activities, and estimates of income and expenditure for the coming year to the Government for approval;
(ii) requiring a statutory body to submit an annual report, statement of accounts and auditor's report to the Government;and/or
(iii) subject to the nature of the statutory body concerned, the Administration can send government representatives to sit on a statutory body as ex-officio members or sending representatives to attend meetings of a statutory body; and/or holding regular meetings with the statutory body to understand its administration and operation.
For public organizations receiving government subventions, to facilitate Directors of Bureaux and Controlling Officers to better perform their regulatory duty, the Government promulgated a set of guidelines on the governance of public organizations in 2008, which explains the broad principles of a governance framework for public organizations. The guidelines clearly point out that a proper governance framework should consist of the following three key elements -
(i) clear objectives and priorities;
(ii) clear delineation of accountability and clear division of responsibilities; and
(iii) robust internal control and reporting/monitoring systems.
As for financial control, the Government issued relevant guidelines on funding for subvented organizations in 2004 for reference by policy bureaux and Controlling Officers. These guidelines require an organization to prepare a budget annually and submit audited financial accounts to the Government. The guidelines also provide that, where necessary, the Government should include the relevant organizations into the scope of audit by the Director of Audit, and enter into a Memorandum of Administrative Arrangement and other instruments with these organizations, which set out the corresponding responsibilities in terms of management and supervision. In using government funding, the organization is required to have in place an appropriate system of cost control and monitoring, and exercise prudent budgetary practices with a view to ensuring that public money is used properly and cost effectively. These two sets of internal guidelines are circulated within the Government regularly for reference.
Further to the above, the Efficiency Unit also published the "Guide to Corporate Governance for Subvented Organizations" in 2010 to provide assistance to board members and senior executives of the subvented organizations. It aims to illustrate best practices of corporate governance for the subvented organizations, and through its deliberation, equip the corresponding officers with better understanding of the principles, systems and good practices of corporate governance, thereby enhancing the governance of the subvented organizations.
Taking the foregoing into account, the Government has already put in place measures to facilitate the effective operation of public organizations in different perspectives. Owing to the diverging nature of functions and responsibilities of different public organizations, we consider it impracticable if a prescribed universal standard is to be applied to the corporate governance of public organizations, or that a "one-off" revision to the monitoring arrangements of public organizations is to be introduced. In general, the existing system has to a certain extent performed a check-and-balance role. The corresponding policy bureaux will conduct individual reviews on the governance structure for public organizations from time to time, having regard to the needs of the community.
(c) Prior to establishing a public organization, the Government will have considered all relevant factors and clearly set out the objectives to be met by the organization as well as the powers that should be conferred on it. The corresponding policy bureaux will review, on a need basis, after the establishment of these public organizations, their effectiveness in service delivery, including whether the objectives of the establishment of these organizations have been effectively achieved. As explained above, owing to the wide coverage of public organizations and the differences in their terms of power, duties and service nature, we consider it impractical for the Government to summarily review the long-term positioning and development of public organizations on a collective basis. The Government recognizes the high expectation from the public on the public organizations. The corresponding policy bureaux will, where necessary, continue to individually review the performance of public organizations under their purview, their modes of operation and long-term development position in response to public needs.
Ends/Wednesday, October 31, 2012
Issued at HKT 13:01
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