REPORT OF THE

PUBLIC ACCOUNTS COMMITTEE

ON

THE REPORTS OF THE DIRECTOR OF AUDIT

ON

THE ACCOUNTS OF THE GOVERNMENT OF

THE HONG KONG SPECIAL ADMINISTRATIVE REGION

FOR THE YEAR ENDED

31 MARCH 2002

AND THE RESULTS OF

VALUE FOR MONEY AUDITS (Report No. 39)

AND

SUPPLEMENTAL REPORT ON

REPORT NO. 38 OF THE DIRECTOR OF AUDIT

ON

THE RESULTS OF

VALUE FOR MONEY AUDITS

February 2003

P.A.C. Report No. 39


CONTENTS

Page

I.INTRODUCTION

1The Establishment of the Committee

1

2Membership of the Committee

1

II.PROCEDURE

1The Committee's Procedure

2 - 3

2 - 4The Committee's Report

3

5The Government's Response

3

III.REPORT OF THE PUBLIC ACCOUNTS COMMITTEE ON REPORT NO. 36 OF THE DIRECTOR OF AUDIT ON THE RESULTS OF VALUE FOR MONEY AUDITS
[P.A.C. REPORT NO. 36]


1Laying of the Report

4

2 - 8The Government Minute

4 - 9

IV.REPORT OF THE PUBLIC ACCOUNTS COMMITTEE ON THE REPORTS OF THE DIRECTOR OF AUDIT ON THE ACCOUNTS OF THE GOVERNMENT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION FOR THE YEAR ENDED 31 MARCH 2001 AND THE RESULTS OF VALUE FOR MONEY AUDITS (REPORT NO. 37) AND SUPPLEMENTAL REPORTS OF THE PUBLIC ACCOUNTS COMMITTEE ON REPORT NOS. 35 AND 36 OF THE DIRECTOR OF AUDIT ON THE RESULTS OF VALUE FOR MONEY AUDITS
[P.A.C. REPORT NO. 37]


1Laying of the Report

10

2 - 67The Government Minute

10 - 44

V.COMMITTEE PROCEEDINGS

1Consideration of the Director of Audit's Report

45

2Meetings

45

3 - 4Arrangement of the Report

45

5Acknowledgements

45

VI.OBSERVATIONS OF THE PUBLIC ACCOUNTS COMMITTEE ON THE REPORT OF THE DIRECTOR OF AUDIT ON THE ACCOUNTS OF THE GOVERNMENT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION FOR THE YEAR ENDED 31 MARCH 2002

46

VII.CHAPTER

Supplemental report on the Director of Audit's Report No. 38

1.Residential services for the elderly

47 - 100

Report on the Director of Audit's Report No. 39

2.The Customs and Excise Department's efforts to protect government revenue from dutiable commodities

101 - 123

3.Special Finance Scheme for small and medium enterprises

124 - 141

4.Small house grants in the New Territories

142 - 165

5.Primary education - Planning and provision of primary school places

166 - 198

6.Primary education - The administration of primary schools

199

7.Primary education - Delivery of effective primary education

200 -220

SIGNATURES OF THE CHAIRMAN, DEPUTY CHAIRMAN AND MEMBERSOF THE COMMITTEE

221

CHAPTERS IN THE DIRECTOR OF AUDIT'S REPORT NOS. 38 AND 39 DEALT WITH IN THE PUBLIC ACCOUNTS COMMITTEE'S REPORT

222

APPENDIX 1Rules of Procedure of the Legislative Council of the Hong Kong Special Administrative Region

223 - 224

APPENDIX 2Paper presented to the Provisional Legislative Council by the Chairman of the Public Accounts Committee at the meeting on 11 February 1998 on Scope of Government Audit in the Hong Kong Special Administrative Region - 'Value for Money Audits'

225 - 227

Appendices relating to Section IV: "Report of the Public Accounts Committee on the Reports of the Director of Audit on the Accounts of the Government of the Hong Kong Special Administrative Region for the Year ended 31 March 2001 and the Results of Value for Money Audits (Report No. 37) and Supplemental Reports of the Public Accounts Committee on Report Nos. 35 and 36 of the Director of Audit on the Results of Value for Money Audits [P.A.C. Report No. 37]"

APPENDIX 3Letter dated 7 January 2003 from the Judiciary Administrator

228 - 229

APPENDIX 4Letter dated 9 January 2003 from the Secretary for the Environment, Transport and Works

230 - 231

APPENDIX 5Letter dated 23 December 2002 from the Director of Agriculture, Fisheries and Conservation

232

APPENDIX 6Letter dated 9 January 2003 from the Government Property Administrator

233 - 234

APPENDIX 7Letter dated 9 January 2003 from the Director of Electrical and Mechanical Services

235 - 236

APPENDIX 8Letter dated 30 December 2002 from the Acting Executive Director, Employees Retraining Board

237 - 239

APPENDIX 9Letter dated 3 January 2003 from the Secretary for Environment, Transport and Works

240 - 242

APPENDIX 10Letter dated 4 January 2003 from the Secretary for Home Affairs

243

APPENDIX 11Letter dated 9 January 2003 from the Secretary for Education and Manpower

244

Appendices relating to Section V: "Committee Proceedings"

APPENDIX 12Witnesses who appeared before the Committee

245 - 247

APPENDIX 13Introductory remarks by the Chairman of the Public Accounts Committee, the Hon Eric LI Ka-cheung, JP, at the first public hearing of the Committee on Monday, 2 December 2002

248 - 249

Appendices relating to Chapter 1: "Residential services for the elderly"

APPENDIX 14Letter dated 23 May 2002 from the Director of Social Welfare

250 - 256

APPENDIX 15Letter dated 24 May 2002 from the Secretary for Health and Welfare

257 - 264

APPENDIX 16Supplementary information provided by the Director of Housing on the distribution of the 887 vacant Housing for Senior Citizens units

265 - 267

APPENDIX 17Letter dated 15 May 2002 from the Director of Housing

268 - 269

APPENDIX 18Letter dated 10 June 2002 from the Director of Housing

270 - 277

APPENDIX 19Letter dated 22 May 2002 from the Director of Housing

278 - 280

APPENDIX 20Letter dated 12 June 2002 from the Secretary for Health and Welfare

281 - 283

APPENDIX 21Letter dated 25 May 2002 from the Chief Executive, Hospital Authority

284 - 285

APPENDIX 22Letter dated 3 May 2002 from the Chief Executive, The Hong Kong Council of Social Service

286 - 292

APPENDIX 23Letter dated 12 July 2002 from the Director of Housing

293 - 297

APPENDIX 24Letter dated 11 December 2002 from the Director of Housing

298 - 299

APPENDIX 25Letter dated 16 July 2002 from the Secretary for Health, Welfare and Food

300 - 302

APPENDIX 26Letter dated 5 August 2002 from the Director of Audit

303 - 305

APPENDIX 27Letter dated 24 October 2002 from the Secretary for Health, Welfare and Food

306 - 307

APPENDIX 28Letter dated 20 January 2003 from the Secretary for Health, Welfare and Food

308 - 311

Appendices relating to Chapter 2: "The Customs and Excise Department's efforts to protect government revenue from dutiable commodities"

APPENDIX 29Paper submitted by the Customs and Excise Department before the public hearing

312 - 336

APPENDIX 30Letter dated 19 December 2002 from the Commissioner of Customs and Excise

337 - 344

APPENDIX 31Letter dated 15 January 2003 from the Commissioner of Customs and Excise

345 - 348

APPENDIX 32Letter dated 28 January 2003 from the Commissioner of Customs and Excise

349 - 351

APPENDIX 33Letter dated 28 January 2003 from the Director of Audit

352 - 353

APPENDIX 34Letter dated 14 December 2002 from the Director of Immigration

354 - 359

APPENDIX 35Letter dated 25 January 2003 from the Commissioner of Customs and Excise

360 - 381

APPENDIX 36Letter dated 28 January 2003 from the Director of Audit

382

APPENDIX 37Letter dated 29 January 2003 from the Acting Privacy Commissioner for Personal Data

383 - 384

APPENDIX 38Letter dated 5 February 2003 from the Commissioner of Customs and Excise

385 - 388

APPENDIX 39Letter dated 6 January 2003 from the Commissioner of Customs and Excise

389 - 391

Appendices relating to Chapter 3: "Special Finance Scheme for small and medium enterprises"

APPENDIX 40Letter dated 17 December 2002 from the Director of Accounting Services

392 - 395

APPENDIX 41Letter dated 31 December 2002 from the Head (Banking Development), Hong Kong Monetary Authority

396

APPENDIX 42Letter dated 30 December 2002 from the Secretary for Commerce, Industry and Technology

397 - 399

APPENDIX 43Letter dated 19 December 2002 from the Secretary for Commerce, Industry and Technology

400 - 406

APPENDIX 44Letter dated 31 December 2002 from the Secretary for Commerce, Industry and Technology

407 - 409

APPENDIX 45Discussion paper for the Finance Committee meeting held on 23 April 1999

410 - 414

APPENDIX 46Discussion paper for the Finance Committee meeting held on 31 July 1998

415 - 418

APPENDIX 47Discussion paper for the Finance Committee meeting held on 12 November 1999

419 - 424

APPENDIX 48Letter dated 17 December 2002 from the Secretary for Commerce, Industry and Technology

425 - 426

APPENDIX 49Minutes of the Finance Committee meeting held on 23 April 1999

427 - 430

Appendices relating to Chapter 4: "Small house grants in the New Territories"

APPENDIX 50Letter dated 30 December 2002 from the Secretary for Housing, Planning and Lands

431 - 433

APPENDIX 51Letter dated 29 January 2003 from the Secretary for Housing, Planning and Lands

434 - 435

APPENDIX 52Letter dated 17 December 2002 from the Director of Lands

436 - 441

APPENDIX 53Letter dated 18 December 2002 from the Chairman, Heung Yee Kuk

442 - 443

APPENDIX 54Letter dated 6 January 2003 from the Director of Lands

444 - 445

Appendices relating to Chapter 5: "Primary education - Planning and provision of primary school places"

APPENDIX 55Letter dated 29 January 2003 from the Secretary for Education and Manpower

446 - 449

APPENDIX 56Letter dated 31 December 2002 from the Director of Education

450 - 452

APPENDIX 57Letter dated 6 December 2002 from the Director of Education

453 - 475

APPENDIX 58Letter dated 29 January 2003 from the Permanent Secretary for Education and Manpower

476 - 477

APPENDIX 59Letter dated 2 January 2003 from the Permanent Secretary for Education and Manpower

478 - 479

APPENDIX 60Letter dated 19 December 2002 from the Director of Education

480 - 486

APPENDIX 61Letter dated 7 January 2003 from the Director of Audit

487 - 489

APPENDIX 62Letter dated 24 January 2003 from the Secretary for Education and Manpower

490 - 491

Appendices relating to Chapter 7: "Primary education - Delivery of effective primary education"

APPENDIX 63Letter dated 29 January 2003 from the Permanent Secretary for Education and Manpower

492 - 493

APPENDIX 64Letter dated 3 December 2002 from the Director of Leisure and Cultural Services

494 - 496

APPENDIX 65Letter dated 25 January 2003 from the Permanent Secretary for Education and Manpower

497 - 498

APPENDIX 66Letter dated 3 December 2002 from the Director of Education

499 - 501

APPENDIX 67Letter dated 6 January 2003 from the Permanent Secretary for Education and Manpower

502 - 504

APPENDIX 68Letter dated 13 December 2002 from the Permanent Secretary for Education and Manpower

505 - 506