For discussion EC(95-96)81
on 14 February 1996
ITEM FOR ESTABLISHMENT SUBCOMMITTEE
OF FINANCE COMMITTEE
HEAD 42 - ELECTRICAL AND MECHANICAL SERVICES DEPARTMENT
Subhead 001 Salaries
Members are invited to recommend to Finance Committee the retention of the following supernumerary posts for a period of one year with effect from 1 April 1996 -
1 Deputy Director of Accounting Services
(D3) ($111,100 - $117,750)
1 Government Electrical and Mechanical Engineer
(D2) ($95,550 - $101,450)
The supernumerary directorate posts created to prepare for the establishment of the Electrical and Mechanical Services (EMS) Trading Fund will lapse at the end of March 1996, some months before we expect the proposed Trading Fund tois expected to come into operation.
2. The Director of Electrical and Mechanical Services (DEMS) proposes to retain the two supernumerary posts of one Deputy Director of Accounting Services (DDAS )(D3) and one Government Electrical and Mechanical Engineer (GEME) (D2) for a period of one year from 1 April 1996.
3. In recent years, we have been trying to make EMSD a more cost-effective and efficient organisation by introducing a more commercial style of operation into the department. As a first step, EMSD charging user departments in April 1992 for all vehicle services through a Suspense Account (Operating Services Account) set up under Section 30 of the Public Finance Ordinance (Cap 2). We have extended the charging arrangements to cover all workshop services since April 1993.
4. The results of inter-departmental charging have been encouraging. Efficiency and service quality have improved under the charging environment. Apart from creating a customer-focused culture in the department, EMSD's clients are also becoming more cost-conscious in their demands for workshop services. To build on the success and to further strengthen the management of EMSD on commercial lines, we shall propose to establish a trading fund in mid-1996 to cover all of EMSD's non-regulatory services.
5. The two supernumerary posts in question have been created since October 1989 to work out arrangements in EMSD for introducing inter-departmental charging and ultimately for setting up the Trading Fund. Following detailed preparatory work including the development of a business plan and the preparation of a framework agreement with the Secretary for Works to set out the financial and institutional arrangements, we consider that EMSD is now ready for Trading Fund operation. In view of the complex and sensitive issues involved in the transition to Trading Fund operation, DEMS proposes to retain the existing supernumerary post of DDAS, internally designated as Development Manager, for one further year. The officer will assist DEMS in overseeing a programme for implementation of the Trading Fund and in updating and modifying the business plan to ensure its successful development and long term viability. He will also establish the necessary financial arrangements, pricing policies and organisational structures.
6. DEMS also proposes to retain the GEME post to provide professional support to the DDAS in carrying out the above tasks. The officer will ensure the proper management of the current workshop businesses, which are already charging their customers and are subject to profitability and performance targets under the Operating Services Account arrangements, and the continued provision of cost-effective and high quality service continue smoothly during the transition.
7. We shall seek Legislative Councils agreement on setting up the EMS Trading Fund in mid-1996. If Members endorse the Trading Fund proposal, we shall then seek the Finance Committees approval for the necessary financial arrangements and establishment changes including the long term requirement of directorate posts to replace these two supernumerary posts. Pending this, DEMS considers that he needs to retain the two posts for the interim period.
8. An organisation chart of the directorate of EMSD and the proposed job descriptions for the two posts are at Enclosures 1, 2, 3.
9. The notional annual salary cost of this proposal at MID-POINT is $2,555,400. Sufficient provision has been included in the 1996-97 draft Estimates to meet the cost of this proposal if approved by Members. There are no other staffing and financial implications.
10. On 18 October 1989, Members approved the creation of the supernumerary posts of one DDAS and one GEME to head a project team to design a new job costing and financial management information system for the purpose of introducing inter-departmental charging and ultimately a Trading Fund in EMSD. Charging of user departments in respect of vehicle maintenance and repairs and related services began in April 1992. Since April 1993 we have further extended the charging scheme to all EMSDs workshop services, which account for $860 million or 39% of the $2,210 million business turnover of EMSD in 1995-96. On 11 March 1994, Members approved the retention of the two posts for a period of two years from 1 April 1994 to undertake preparatory work of the Trading Fund and to oversee its implementation during the initial period.
11. The Civil Service Branch considers the grading and ranking of the two posts appropriate, having regard to the responsibilities and professional input required.
12. As the DDAS and GEME posts are proposed on a supernumerary basis, we will report their retention, if approved, to the Standing Committee on Directorate Salaries and Conditions of Service in accordance with the agreed procedure.
Enclosure 2 to EC(95-96)81
Rank : Deputy Director of Accounting Services (D3)
Main Duties and Responsibilities :
Responsible to the Director of Electrical & Mechanical Services for -
- advising on the scope of activities to be included in the EMS Trading Fund, and maintaining a programme for the preparation of these activities for Trading Fund status by the implementation date;
- establishing a formal business planning process and co-ordinating the production of the first business plans;
- preparing the EMS Trading Fund framework document and liaising with the various policy branches to obtain approval;
- proposing financial arrangements for the Trading Fund, and liaising with Finance Branch and other policy branches for their approval, including valuation of appropriated assets, capital structure, and investment policies;
- proposing appropriate pricing policies for each Trading Fund activity and co-ordinating the submission of a Pricing Schedule aimed at establishing the financial viability of the Trading Fund;
- proposing appropriate organisational structures, including implementation proposals, to enable the EMSD businesses to function at their optimal effectiveness;
- specifying the financial management techniques and facilities needed to make EMSD successful in its business; proposing and implementing appropriate information systems to give effect to the new financial management regime;
- advising the Finance Branch on budgetary matters relating to EMSD services to provide Government departments and autonomous bodies with the appropriate funds to purchase EMSD services;
- ensuring that adequate systems and procedures are in place within the EMS Trading Fund in compliance with all financial and accounting requirements of the Trading Funds Ordinance;
- managing and co-ordinating the work of the Works and Management Services Branch and the Accounting Services Division; and
- overseeing the implementation of the Trading Fund during the initial period.
Enclosure 3 to EC(95-96)81
Electrical and Mechanical Services Department
Rank : Government Electrical & Mechanical Engineer (D2)
Main Duties and Responsibilities :
Responsible to the Development Manager for -
- ensuring the efficient management of the Works and Management Services Branch, including the ongoing management and improvement of the Workshops business;
- ensuring the provision of cost-effective, high-quality services to meet customers' satisfaction and needs;
- co-ordinating and monitoring the activities of computerization, management information system administration, quality management and business process improvements, and management training for all branches of the department relating to the Trading Fund operation;
- reviewing policies, programmes and procedures of the branch to ensure that the services offered remain commercially viable and suitable for Trading Fund operation;
- organizing the preparatory work for the re-organization under Trading Fund operation.
- advising on new business potential and preparing business and action plans to achieve the potential; and
- defining new strategies and plans for the development of better communication between EMSD and its customers, and EMSD and its staff.
Last Updated on 3 December 1998