For discussion
FCR(97-98)66
on 28 November 1997

ITEM FOR FINANCE COMMITTEE

HEAD 142 - GOVERNMENT SECRETARIAT: OFFICES OF THE CHIEF SECRETARY FOR ADMINISTRATION AND THE FINANCIAL SECRETARY
Subhead 149 General departmental expenses

Members are invited to approve supplementary provision of $16,767,000.

PROBLEM

The approved provision of $41,115,000 under Head 142 Government Secretariat : Offices of the Chief Secretary for Administration and the Financial Secretary Subhead 149 General departmental expenses is insufficient to meet increased expenditure in 1997-98 as a result of a number of significant ad hoc requirements.

PROPOSAL

2.We propose supplementary provision of $16,767,000.

JUSTIFICATION

3.The approved provision of $41,115,000 under Subhead 149 General departmental expenses in 1997-98 covers expenses that are directly related to the day to day running of the various offices and units¹accounted for under this head of expenditure. We estimate that expenditure for the whole of the 1997-98 financial year will exceed the approved provision by $16,767,000, as follows -

		$ ' 000
	(a) Actual expenditure up to end October 1997	34,646
Add	(b) Estimated expenditure for the remainder of the1997-98 financial year	23,236
	(c) Estimated total expenditure for 1997-98 [(a) + (b)]	57,882
Less	(d) Approved provision for 1997-98	41,115
Supplementary provision required [(c) - (d)]		16,767

4.The estimated additional expenditure of $16,767,000 in 1997-98 is mainly due to expenses associated with the Handover Ceremony Coordination Office (HCCO), the Commission of Inquiry into the Garley Building Fire, the Chief Executive (CE)'s Office for the period prior to the reunification on 1 July 1997 and office removal in the Central Government Offices (CGO), which we have not allowed for under this head of expenditure when we prepared the 1997-98 draft Estimates. We set out below a breakdown of the additional requirements -

General departmental expenses	Estimated cost ($ ' 000)
(a) HCCO	3,100
(b) Commission of Inquiry into the Garley Building Fire	1,500
(c) CE ' s Office for the period up to 30 June 1997	6,691
(d) Office removal in CGO	4,707
(e) Additional expenses of the Protocol Division	769
Total	16,767

5.As regards paragraph 4(a), we established the HCCO under the then Chief Secretary's Office on 2 December 1996 to enhance central coordination and overall planning for the Handover Ceremony. The HCCO took over from the former Home Affairs Branch (HAB) the responsibility for the overall planning and logistical preparations for the Handover Ceremony and associated events, with the HAB still performing a key supporting role especially in community participation. We disbanded the HCCO on 16 August 1997. We estimate that the HCCO has incurred a total of $3.1 million in general departmental expenses during its existence, a breakdown of which is in the Enclosure.

6.As regards paragraph 4(b), the Commission of Inquiry was appointed on 17 December 1996 to conduct a comprehensive investigation into the fire that broke out in Garley Building on 20 November 1996, leading to serious injuries and deaths. To provide administrative and secretarial support to the Commission, we formally established a secretariat under the then Chief Secretary's Office on 2 January 1997. The Commission had wide legal powers, including powers to summon persons to attend the hearings to give evidence and to examine witnesses under oath. The Commission produced an interim report in June 1997 covering the cause of the fire and the scale of casualties. The Commission issued a final report before it was disbanded in October 1997. We estimate that the Commission has incurred a total of $1.5 million in general departmental expenses in 1997-98 as detailed in the Enclosure.

7.As regards paragraph 4(c), before the reunification on 1 July 1997, we met part of the operating expenses of the CE's Office under the expenditure vote for Offices of the Chief Secretary and the Financial Secretary to enable it to make preparations for the setting up of the Government of Hong Kong Special Administrative Region. We estimate that the CE's Office has incurred $6,691,000 in general departmental expenses accounted for under the relevant subhead for the period from 1 April to 30 June 1997. We set out the breakdown in the Enclosure.

8.As regards paragraph 4(d), the Director of Administration is responsible for the management of the CGO. To make room for the CE to move his office into the Main Wing of the CGO, we relocated the offices of the Chief Secretary, the Financial Secretary and the Administration Wing from the Main Wing to the West Wing of CGO in October 1997. We require additional general departmental expenses of $4,707,000 for the following -

1. $3,240,000 for new furniture and security equipment for the Chief Secretary, the Financial Secretary and the Administration Wing upon relocation; and

2. $1,467,000 for the relocation of the Local Area Network for the Chief Secretary's Office, the Financial Secretary's Office and the Administration Wing.

9.As regards paragraph 4(e), the additional expenditure of the Protocol Division is due to increased activities since June this year arising from reception arrangements for foreign leaders and international dignitaries attending major events in Hong Kong, such as the Handover Ceremony and the IMF/World Bank 1997 Annual Meeting. The increased expenditure is incurred in purchasing office equipment, hiring of vehicles and other miscellaneous expenses.

FINANCIAL IMPLICATIONS

10.If Members approve the proposal, we shall offset the supplementary provision of $16,767,000 by deleting an equivalent amount under Head 106 Miscellaneous Services Subhead 251 Additional commitments.

Offices of the Chief Secretary for Administration and the Financial Secretary
November 1997

1.These include the Chief Secretary for Administration's Office, Financial Secretary's Office, Administration Wing, Efficiency Unit, Central Policy Unit, Government Records Service Division, Protocol Division, Business and Services Promotion Unit and the Executive Council Secretariat..

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Enclosure to FCR(97-98)66

Breakdown of General Departmental Expenses incurred by the Handover Ceremony Coordination Office, the Commission of Inquiry into the Garley Building Fire and the Chief Executive's Office

Expenditure Item	HCCO $ ' 000	The Commission $ ' 000	CE ' s Office $ ' 000
(a)Stores and equipment	361	95	1,462
(b)Light and power	187	15	224
(c)Temporary staff	306	-	-
(d)Training expenses	8	-	6
(e)Hire of services and professional fees	967	1,250	659
(f)Administration	900	50	1,183
(g)Transport and travelling	281	11	1,863
(h)Specialist supplies	73	-	704
(i)Payments for trading fund services	17	5	548
(j)Recruiting expenses	-	74	42
Total	3,100	1,500	6,691