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LCQ1: Financial matters of tertiary institutions funded by the University Grants Committee
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     Following is a question by the Hon Chan Kam-lam and a reply by the Secretary for Education, Mr Eddie Ng Hak-kim, in the Legislative Council today (November 20):

Question:

     It has been reported that during the period between May last year and February this year, an initiator of the Occupy Central movement (OC), who is an Associate Professor at the Faculty of Law of the University of Hong Kong (HKU), passed on four donations totalling $1.45 million respectively to the Faculty of Humanities, the Faculty of Law and the Public Opinion Programme of HKU, for funding OC-related activities such as paying the remunerations of a research assistant who works for OC and sponsoring the Project Civil Referendum conducted by the Public Opinion Programme. He also admitted that the donations were made in the name of another OC initiator but did not account for the true sources of the funds. Some members of the public worry that certain people are conducting political activities under the guise of funding academic researches, thereby gravely damaging the political neutrality as well as academic freedom of tertiary institutions. Regarding the financial matters of various tertiary institutions funded by the University Grants Committee (UGC), will the Government inform this Council:

(1) whether it knows if UGC has issued to institutions under its auspices guidelines on whether they may accept donations designated for funding political activities or remunerating the relevant staff, and if UGC has requested the institutions to require their academic units accepting donations (in particular those donations used for designated projects, activities or staff remunerations) to submit reports setting out detailed accounts of the uses of the donations, and the relevant research data and academic achievements, so as to ensure that the donations are used for academic researches instead of political activities; if there are such guidelines and requirements, whether UGC has requested HKU to assess if the handling of the aforesaid donations has breached such guidelines and requirements;

(2) whether it knows if UGC has currently requested the institutions to verify the true sources of donations, so as to prevent anyone from conducting political activities in the names of the institutions; whether UGC has monitored the institutions in this regard; and

(3) as quite a number of members of the public have lodged complaints with HKU against the aforesaid teaching staff member about his organising and participation in illegal road occupation and assemblies, and about his acting as a middleman to make donations of funds with unidentified true sources to the institution for conducting such activities, whether the Government knows if UGC has looked into how the institution has followed up on such complaints, and whether various institutions have put in place mechanisms for handling complaints lodged against their teaching staff in this regard; if they have, of the details?

Reply:

President,

     All institutions funded by the University Grants Committee (UGC) are autonomous with their own Ordinances and governing Councils. The UGC Notes on Procedures clearly state that institutions enjoy autonomy in the development of curricula and academic standards, selection of staff and students, initiation and conduct of researches, internal allocation of resources, etc. However, in view of the significant funding the institutions receive in the form of Government subvention and private contributions, as well as the importance of higher education to the development of society, it is incumbent upon the Government and the community at large to have a legitimate interest in the operation of the institutions. Therefore, while the Government and the UGC attach great importance to safeguarding academic freedom and institutional autonomy, institutions are expected to remain committed to transparency and accountability in their operation to ensure that funding, including donations, is put to the appropriate use that serves the best interests of the community and students.

(1) and (2) UGC-funded institutions are autonomous in the management of their finance, including the acceptance and use of donations. In general, neither the Government nor the UGC has stipulated specific rules on the handling of donations. However, as a good management practice and to protect their reputation and academic freedom, 11 higher education institutions, including the UGC-funded institutions, set up a working group with the Independent Commission Against Corruption (ICAC) in 2011, which studied various areas including the administration of donations in depth, and compiled a guide on relevant best practices. All institutions have confirmed that their internal guidelines and procedures for handling donations are in line with this guide. Salient points are summarised below:

Principles for handling donations

(i) donations should contribute to the enhancement of teaching, research and overall development of the institutions and not for personal benefits of individuals;

(ii) no donation should be attached with conditions that would adversely affect an institution's ability to carry out its functions fairly and impartially; and

(iii) donations from sources known to an institution as illegal or unethical should not be accepted.

Acceptance of donations

     The Council of each institution is the highest authority in deciding the acceptance of donations. Some Councils have set up committees, which include independent members, for the purpose of vetting, monitoring or guiding matters relating to donations. In general, the Councils can delegate the approving authority of accepting donations to different levels of executives according to the size of a donation. But a donation involving a huge amount of money or a significant policy decision would require approval of the Councils and/or their relevant committees. In deciding whether to accept a donation, the institutions follow the above-mentioned principles and their internal guidelines. As a general rule, institutions do not accept donations from unknown sources or unidentified donors, and will collect relevant information about the background of the donors as far as practicable. That said, once the identity of the donors is ascertained, institutions will respect their privacy and wishes.

Management and use of donations

     Each institution has a dedicated department for central co-ordination and administration of various donation-related matters. While individual staff, departments or faculties may also solicit and accept donations within their respective ambit of delegated authority, the dedicated department must be kept informed. All donations are properly documented and the overall situation of donating is reported regularly to the respective Councils. The donations are used in accordance with the relevant legislation, internal guidelines and the donors' wishes. Like other revenue and expenditure items, the use and record of the donations are subject to audit by independent auditors, and the total amount of donations received and expended is published in the institution's annual financial report, which is released for public scrutiny.

     On the understanding that the guide on relevant best practices compiled by institutions and ICAC is complied with, institutions handle and examine each donation case by themselves according to their internal guidelines and are accountable for their decisions.

(3) According to the information provided by funded institutions, they have mechanisms and procedures for handling external complaints against their staff. In general, after receiving a complaint, the unit concerned will look into the compliant to see if it has primary justifications. Depending on the nature of the complaint and its seriousness, the case will be, if necessary, handled by an officer of the appropriate rank, or an investigation team/committee, and investigation and hearing, etc. will be conducted. The institution will take appropriate action or disciplinary measure based on the result of the investigation. Prior to investigation, the institution will notify the staff being complained against of the case and allow the subject an opportunity to clarify and respond. Also, each institution has an appeal mechanism in place to ensure that complaints are handled fairly and impartially. All officers should observe the principle of confidentiality, and actions pertaining to complaints-handling will be properly recorded and filed.

     To re-iterate, institutions enjoy autonomy in the handling of their internal affairs, including the handling of external complaints against their staff. However, the UGC Notes on Procedures also state that institutional autonomy does not exempt institutions from public interest and criticism. In this regard, both the UGC and I expect that the institutions will take each and every complaint against their staff seriously, and handle it in a fair and just manner in accordance with the established principle and mechanism.

     As regards the recent public concern on the source and use of donations, the Government will further look into these cases. We emphasise that the institutions should clearly account for the source and use of the donations. Thank you.

Ends/Thursday, November 20, 2014
Issued at HKT 12:31

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