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LCQ17: Compliance with procurement guidelines by the West Kowloon Cultural District Authority
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     Following is a question by the Hon Tanya Chan and a written reply by the Secretary for Home Affairs, Mr Lau Kong-wah, in the Legislative Council today (April 12):
 
Question:

     Regarding the compliance with its procurement guidelines by the West Kowloon Cultural District Authority (WKCDA), will the Government inform this Council:
 
(1) whether it knows if WKCDA has, on a regular or non-regular basis, conducted internal audits on compliance with the procurement guidelines; if WKCDA has, of the procedure and details of such audits; if not, the mechanism currently put in place by WKCDA to uncover and follow up on non-compliant cases;
 
(2) whether the Government and WKCDA have launched an investigation into whether the procurement guidelines have been breached when the proposed Hong Kong Palace Museum (Palace Museum) project was taken forward; if so, of the investigation outcome, and whether follow-up actions have been taken; if so, of the details; if no follow-up action has been taken, the reasons for that;
 
(3) whether the Chief Secretary for Administration, in his capacity as the Chairman of the Board of WKCDA, and the Secretary for Home Affairs, who is responsible for Hong Kong's cultural policies, have approached the Chief Executive Officer or other senior management staff of WKCDA to gain an understanding of the procedure for approving several consultancy contracts relating to the Palace Museum project; if so, of the details; if not, the reasons for that; and
 
(4) whether it knows if WKCDA at present has any plan to comprehensively review and amend the procurement guidelines, so as to enhance the transparency of the procurement process and step up the monitoring of the compliance with such guidelines; if WKCDA has, of the details; if not, the reasons for that?
 
Reply:
 
President,

     My reply to various parts of the question raised by the Hon Tanya Chan is as follows:
 
(1) The West Kowloon Cultural District Authority (WKCDA/ the Authority) has in place an Internal Audit Department, which carries out periodic internal audits on various matters, including compliance of the procurement activities and processes of various departments of WKCDA with its internal procurement guidelines and control requirements.  The Audit Committee under the WKCDA Board will review and monitor the effectiveness of the Authority's internal control and consider any findings of audits and reviews on internal control matters.

     In the past few financial years, WKCDA's Internal Audit Department has conducted internal audits on the procurement activities and processes.  Management is required to undertake corresponding follow-up actions in response to the audit recommendations.  WKCDA's Internal Audit Department will review the progress of the follow-up actions in subsequent internal audits and will report to the Audit Committee. 
 
(2) and (3) The approval process for the procurement activities undertaken for the implementation of the Hong Kong Palace Museum project adhered to WKCDA's Procurement Procedures for Capital Projects.
 
     The WKCDA Board is chaired by the Chief Secretary for Administration, with three Principal Officials appointed as Board members including the Secretary for Home Affairs.  The Board is the highest governing and executive body of the Authority.  It is responsible for making high-level decisions on strategic issues, governance systems and major policies, including the consideration and approval of the Authority's policies, procedures and guidelines on procurement.  Akin to other public bodies, WKCDA has established a system of internal delegation of authority.  The WKCDA Board, its Committees, and executives at different levels are delegated with authority to undertake different matters (with corresponding internal reporting requirements where appropriate) so that the organisation as a whole can operate effectively and smoothly.  
 
     Under WKCDA's procurement procedures, the use of single tendering and the award of a consultancy agreement with a value of less than $5 million is within the approving authority of the Chief Executive Officer; Director, Project Control; and Executive Director, Finance of WKCDA; without the need to notify the Board in advance.  The Authority reports regularly to the Board on contracts awarded under delegated authority.

     In respect of the Hong Kong Palace Museum project, the WKCDA Board is kept fully in the picture in respect of the details and progress of the project and has provided its comment in a timely manner.

(4) WKCDA carries out periodic reviews of its procurement policies, procedures and guidelines.  The last such review was completed in 2016.  The procurement policies, procedures and guidelines of the Authority are available at the WKCDA website for public reference to enhance the level of transparency.  WKCDA will continue to adhere strictly to the procurement policies, procedures and guidelines in conducting procurement activities.
 
Ends/Wednesday, April 12, 2017
Issued at HKT 12:00
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