SUPPLEMENTAL REPORT OF THE
PUBLIC ACCOUNTS COMMITTEE
ON
REPORT NO. 40 OF THE DIRECTOR OF AUDIT
ON
THE RESULTS OF
VALUE FOR MONEY AUDITS

November 2003

P.A.C. Report No. 40A

Page
CONTENTS
I.INTRODUCTION

1The Establishment of the Committee

1

2 - 3Membership of the Committee

1

II.PROCEDURE

1The Committee's Procedure

2 - 3

2The Committee's Report3

3The Government's Response3

III.COMMITTEE PROCEEDINGS

1Meetings4

2 - 3Arrangement of the Report4

4Acknowledgements4

IV.CHAPTER

1.University Grants Committee funded institutions - Governance, strategic planning and financial and performance reporting

5 - 37

2.University Grants Committee funded institutions - General administrative services

38 - 52

3.University Grants Committee funded institutions - Staff remuneration packages and stipends

53 - 84

SIGNATURES OF THE DEPUTY CHAIRMAN AND MEMBERS OF THE COMMITTEE WHO ARE INVOLVED IN THE EXAMINATION OF THE THREE CHAPTERS IN THIS REPORT

85

CHAPTERS IN THE DIRECTOR OF AUDIT'S REPORT NO. 40 DEALT WITH IN THE PUBLIC ACCOUNTS COMMITTEE'S SUPPLEMENTAL REPORT

86

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

87 - 88

APPENDIX 2Opening remarks by the Deputy Chairman of the Public Accounts Committee, Hon Emily LAU Wai-hing, JP, at the public hearing of the Committee on Wednesday, 14 May 2003

89 - 90

APPENDIX 3Paper 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'

91 - 93

APPENDIX 4Witnesses who appeared before the Committee

94 - 96

Appendices relating Chapter 1: "University Grants Committee funded institutions -Governance, strategic planning and financial and performance reporting"

APPENDIX 5Letter of 7 June 2003 from the Vice-Chancellor, The University of Hong Kong

97 - 98

APPENDIX 6Letter of 8 July 2003 from the Vice-Chancellor, The University of Hong Kong

99

APPENDIX 7Letter of 12 June 2003 from the Vice-Chancellor, The Chinese University of Hong Kong

100 - 101

APPENDIX 8Letter of 30 May 2003 from the Secretary for Education and Manpower

102 - 133

APPENDIX 9Letter of 9 July 2003 from the Vice-Chancellor, The Chinese University of Hong Kong

134

APPENDIX 10Letter of 14 July 2003 from the President and Vice-Chancellor, Hong Kong Baptist University

135 - 137

APPENDIX 11Letter of 23 July 2003 from the President and Vice-Chancellor, Hong Kong Baptist University

138 - 139

APPENDIX 12Letter of 14 July 2003 from the Vice-Chancellor, The University of Hong Kong

140 - 142

APPENDIX 13Letter of 29 July 2003 from the Vice-Chancellor, The University of Hong Kong

143 - 144

APPENDIX 14Letter of 14 July 2003 from the Acting Vice-Chancellor, The Chinese University of Hong Kong

145 - 147

APPENDIX 15Letter of 29 July 2003 from the Vice-Chancellor, The Chinese University of Hong Kong

148 - 149

APPENDIX 16Letter of 11 July 2003 from the Acting President, City University of Hong Kong

150 - 152

APPENDIX 17Letter of 28 July 2003 from the President and University Professor, City University of Hong Kong

153 - 154

APPENDIX 18Letter of 11 July 2003 from the Vice President (Resources and Administrative Services), The Hong Kong Institute of Education

155 - 156

APPENDIX 19Letter of 30 July 2003 from the Vice President (Resources and Administrative Services), The Hong Kong Institute of Education

157 - 158

APPENDIX 20Letter of 14 July 2003 from the Acting President, The Hong Kong University of Science and Technology

159 - 160

APPENDIX 21Letter of 29 July 2003 from the Executive Assistant to Vice-President for Administration and Business, The Hong Kong University of Science and Technology

161 - 162

APPENDIX 22Letter of 11 July 2003 from the Secretary to Council, The Hong Kong Polytechnic University

163 - 164

APPENDIX 23Letter of 28 July 2003 from the Secretary to Council, The Hong Kong Polytechnic University

165 - 166

APPENDIX 24Letter of 14 July 2003 from the Secretary to the Council, Lingnan University

167 - 169

APPENDIX 25A summary of the attendance data contained in Appendices 10 to 24

170 - 177

APPENDIX 26Letter of 26 May 2003 from the Secretary-General, University Grants Committee

178 - 181

APPENDIX 27Letter of 30 May 2003 from the Vice-Chancellor, The Chinese University of Hong Kong

182 - 183

APPENDIX 28Memo of 30 May 2003 from the Secretary-General, University Grants Committee to the Director of Audit

184 - 186

APPENDIX 29Letter of 9 October 2003 from the Director of Finance, Hong Kong Baptist University

187 - 191

APPENDIX 30Letter of 17 October 2003 from the Director of Audit

192 - 194

Appendices relating Chapter 2: "University Grants Committee funded institutions - General administrative services"

APPENDIX 31Letter of 13 June 2003 from the President and Vice-Chancellor, Hong Kong Baptist University

195 - 196

APPENDIX 32Letter of 10 July 2003 from the Secretary for Education and Manpower

197 - 198

Appendices relating the Chapter 3: "University Grants Committee funded institutions - Staff remuneration packages and stipends"

APPENDIX 33Opening Remarks by Prof Paul CHU Ching-wu, President, The Hong Kong University of Science and Technology, and Convenor, Heads of Universities Committee, at the public hearing of the Public Accounts Committee on 14 May 2003

199 - 201

APPENDIX 34Letter of 24 May 2003 from the Council Chairman, The Hong Kong Polytechnic University

202 - 203

APPENDIX 35Letter of 4 July 2003 from the Council Chairman, The Hong Kong Polytechnic University

204

APPENDIX 36Letter of 9 July 2003 from the Secretary-General, University Grants Committee

205 - 207

APPENDIX 37Letter of 31 July 2003 from the Director of Audit

208 - 209

APPENDIX 38Finance Committee Paper FCR(96-97)30 for discussion on 28 June 1996

210 - 219

APPENDIX 39Letter of 26 May 2003 from the Secretary-General, University Grants Committee

220 - 226

APPENDIX 40Submission of 12 May 2003 from the Federation of Hong Kong Higher Education Staff Associations

227

APPENDIX 41Response of 13 May 2003 from the Audit Commission to the Federation of Hong Kong Higher Education Staff Associations' submission

228

APPENDIX 42Letter of 4 August 2003 from the President, The Hong Kong University of Science and Technology, and Convenor, Heads of Universities Committee

229 - 262

APPENDIX 43Letter of 26 May 2003 from the Acting President, The Hong Kong University of Science and Technology

263 - 282

APPENDIX 44Letter of 11 July 2003 from the Acting President, The Hong Kong University of Science and Technology

283 - 286

APPENDIX 45Letter of 10 July 2003 from the Secretary for Education and Manpower

287 - 288

APPENDIX 46Letter of 27 May 2003 from the Secretary for Education and Manpower

289 - 290

APPENDIX 47Letter of 16 May 2003 from the University Bursar, The Chinese University of Hong Kong

291 - 294

APPENDIX 48Letter of 22 May 2003 from the Senior Assistant Registrar (Vice-Chancellor's Office), The University of Hong Kong

295 - 296