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LCQ19: Accountable Operating Expenses Reimbursement for members of District Councils

     Following is a question by Dr Hon Kenneth Chan and a written reply by the Secretary for Home Affairs, Mr Lau Kong-wah, in the Legislative Council today (October 14):


     Currently, members of the District Councils (DCs) are provided with an accountable Operating Expenses Reimbursement (OER) to meet operational expenses incurred in discharging DC duties. The Home Affairs Department has formulated the Guidelines on the Remuneration Package for Members of the District Councils of the HKSAR (the Guidelines) for DC members to follow. In this connection, will the Government inform this Council:

(1) whether, according to the Guidelines, DC members may claim reimbursements for the operational expenses involving conflicts of interests (e.g. procurement of goods or services from companies the shares of which they own); if they may not, of the details; if they may, the reasons for that;

(2) of the number (with a breakdown by DC) and nature of cases of contravention of the Guidelines identified by the authorities in the past three years, as well as the follow-up actions taken by the authorities in respect of such cases;

(3) given that reimbursement claims submitted by DC members are processed by the secretariats of the DCs to which the DC members belong, how the authorities ensure that the various secretariats adopt the same yardsticks in processing these claims; whether the authorities will consider introducing an independent audit system to review such reimbursement claims; if they will, of the work plan and timetable; if not, the reasons for that; and

(4) whether it will consider amending the Guidelines to prevent the occurrence of a conflict-of-interests/roles situation when DC members make procurement in discharging DC duties; if it will, of the work plan and timetable; if not, the reasons for that?



     District Council (DC) members are provided with Operating Expenses Reimbursement (OER) to cover expenses incurred for discharging DC duties. The Home Affairs Department (HAD) has formulated the Guidelines on the Remuneration Package for Members of the District Councils of the HKSAR (the Guidelines) to provide clear guidance for DC members to follow, setting out claimable items, eligibility criteria, reimbursement procedures, etc. All DC members are required to observe the Guidelines. The OER is reimbursed on an accountable basis. Related claim forms, supporting documents and declaration forms (including copies of tenancy agreements and rental receipts), will be made available for public inspection.

     The four parts of the question is replied as follows:

(1) According to the Guidelines, a DC member should exercise prudence and uphold the principles of openness, competitiveness and value for money in making procurement to be paid by public funds. A DC member or his staff should not engage a contractor or supplier whose business he or any of his relatives has financial interest or is in control. Neither should a DC member nor his staff, nor any of their relatives, derive or be able to derive any financial benefits from any transaction for which reimbursement of expenses is claimed. If a DC member considers it appropriate to procure goods or services from such contractor or supplier, he should invite, where practicable, at least three quotations for prices and services comparison, and complete the Declaration Form to declare interest and state his justifications for the decision (e.g. sole supplier). Reimbursement claims should be made by submitting the Declaration Form and related quotation documents (if any).

(2) and (3) Eligibility criteria for various types of expenses reimbursements are set out in the Guidelines. All applications for reimbursement will be vetted carefully by the respective DC Secretariats, who will, if in doubt, request clarification and/or submission of supplementary materials from the DC members concerned to ensure compliance of such criteria. Seminars will also be held by the HAD for Secretariat staff to enhance their understanding of the vetting mechanism. The Management Audit Section of the HAD will conduct sampling audit on the reimbursement applications to examine if the vetting staff have acted according to the requirements of the Guidelines when processing the applications. In case of non-compliance, the relevant Secretariats will take appropriate follow-up actions. For example, for duplicate claims for expenses or claims for non-reimbursable expenses, the relevant Secretariats will require the DC members concerned to refund the related amount to the Government.

     From 2013 to 2015 (as at September 30, 2015), the DC Secretariats in the 18 districts approved 6 209, 6 641 and 4 462 OER applications respectively. Subsequent to reimbursement, 12, 8 and 7 cases of OER not compliant with the Guidelines were identified. The relevant Secretariats have taken appropriate follow-up actions. The nature of these cases and the corresponding follow-up actions are at Annex.

(4) The prevailing Guidelines, together with the management audit system, are effective in guarding against conflict of interest or roles when DC members make procurement for discharging DC duties. If conflict of interest is really unavoidable or has arisen, the DC members concerned, when applying for reimbursement, should make a declaration of interest, the content of which will be made available for public inspection. This requirement is more or less the same as the rules set out in the guide for reimbursement of operating expenses by Legislative Council members. The HAD will review the Guidelines from time to time in order to ensure the proper use of public funds.

Ends/Wednesday, October 14, 2015
Issued at HKT 15:17


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