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Following is the speech (translation) by the Chief Secretary for Administration, Mr Henry Tang, introducing the Government Minute in response to Report No. 49A of the Public Accounts Committee dated April 2008 in the Legislative Council today (July 9):
President's Deputy,
Laid on the table today is the Government Minute responding to Report No. 49A of the Public Accounts Committee (PAC).
When presenting the PAC Report No. 49A on April 30, the Chairman of the PAC set out in detail the comments of the PAC on two chapters of Report No. 49 of the Director of Audit concerning the Hong Kong Tourism Board (HKTB). The Administration is grateful for the time and effort that the PAC has devoted. Details of the Government's response to the conclusions and recommendations in the PAC Report are set out in the Minute. Today, I would like to highlight the key measures taken in the relevant areas.
Corporate Governance of the HKTB
The Administration and the HKTB agree that there is room for improving corporate governance as well as internal control and management of the HKTB. The Administration has formulated additional systemic arrangements with the HKTB to improve its business planning and budget approval process. The Secretary for Commerce and Economic Development has appointed February 28 as the date before which the HKTB has to forward its annual programme of activities and estimates of its income and expenditure for his approval every year. The HKTB has also strengthened its long-term strategic planning process which includes annual assessment of its long-term plan and the preparation of a rolling three-year business roadmap every year.
In response to the PAC's recommendations, the Administration has, together with the HKTB, implemented four additional measures to strengthen the HKTB's internal control as well as corporate governance.
* First, we have asked the HKTB to report quarterly to the Controlling Officer on its work and use of subvention. Such regular reporting would help bring the Controlling Officer's attention to major issues or challenges besetting the HKTB for timely intervention and support if necessary. This will also help her to ensure the proper and prudent use of public funds.
* Second, the Administration has urged the HKTB to review the operation of the four committees established under the Board with a view to strengthening corporate governance and the mechanism for the Committees to advise the Board. The HKTB aims at completing the review in this financial year.
* Third, to raise awareness of the HKTB's senior management on the prudent use of public funds, the Tourism Commission will conduct briefings for senior staff of the HKTB at General Manager level or above on the Government's expectation relating to the compliance of due procedures governing the use of public funding and provide them with relevant Government documents and guidelines.
* Lastly, the Administration has urged the HKTB to stipulate, as a core competence, reasonable knowledge of corporate governance and management of organisation, in its future recruitment of senior management.
As regards the 75 improvement measures that the HKTB drew up in the light of the Director of Audit's recommendations, the HKTB has made satisfactory progress in their implementation. These measures encompass all the major areas of the HKTB's work, including strategic planning, performance measure and reporting, remuneration and recruitment, planning of marketing activities as well as execution and evaluation of mega events. So far, the HKTB has completed 63 of them. Another 12 improvement measures are in progress and will be fully completed within this financial year. We will continue to closely monitor the HKTB's progress in implementing these improvement measures.
Executive Medical Plan
The PAC has considered in detail the provision of the executive medical plan to the former Executive Director of the HKTB. It has recommended the HKTB to consider whether it can recover the difference in premium between the executive medical plan and the medical and dental insurance plans specified in the Employees' Handbook. In response, the HKTB has followed up this recommendation and announced on June 20, 2008 that its former Executive Director had paid to the HKTB the difference in premium. The PAC has also recommended the Administration to consider whether the case should be referred to law enforcement agency for follow-up action. In view of the PAC's recommendation and information provided by relevant personnel at the PAC hearings, we have already referred this case to the law enforcement agencies to consider whether to take any further follow-up action.
Governance of Publicly-funded Statutory Organisations
Let me turn to the recommendations of the PAC on roles and responsibility of government officials sitting on the governing bodies of publicly-funded statutory organisations. The report on the review of the role and responsibility of government officials sitting on the governing bodies of publicly-funded or government-owned statutory bodies and companies is being finalised and will be submitted to the PAC soon. The coverage of the limited review, which was undertaken originally in response to the PAC report on Hong Kong Applied Science and Technology Research Institute Company Limited, initially included government-owned statutory corporations, government-owned companies, and non-government-owned companies. As a positive response to the PAC's recommendation in the HKTB report, the scope of the review is expanded to include statutory bodies which are government-owned or under recurrent funding from the Government, and companies which are partly or wholly funded by the Government. The review is also expanded to examine measures to ensure that good corporate governance and management are in place in publicly-funded statutory organisations.
The Administration took note of the PAC's recommendation about ensuring that Controlling Officers for publicly-funded organisations effectively perform their roles and responsibilities. In accordance with the Public Finance Ordinance, Controlling Officers are responsible and accountable for the proper use of public funds under their control. To help Controlling Officers discharge their funding control responsibility over subvented organisations, including publicly-funded statutory organisations, the Administration promulgates a set of guidelines on the management and control of government funding for subvented organisations with a wide range of measures which Controlling Officers may use to carry out their roles and discharge their funding control responsibility. We believe that the guidelines can effectively help Controlling Officers exercise funding control over the subvented organisations under their purview.
President¡¦s Deputy, the tourism industry is one of the major pillars of Hong Kong's economy. The HKTB is tasked to promote Hong Kong globally as a leading international city in Asia and a world class tourist destination. Sound corporate governance framework, stringent business planning procedures and strengthened internal control will empower the HKTB to perform these important functions more effectively, driving value-for-money and performance.
Finally, I would like to thank the PAC for its constructive comments and recommendations. These comments and recommendations are useful in ensuring value for money in the delivery of public services. The Administration is pleased to accept these criticisms and comments. As always, we stand ready to respond promptly. Thank you.
Ends/Wednesday, July 9, 2008
Issued at HKT 12:04
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