May 18, 2011

Chief Secretary Henry Tang

When presenting Report No.55 on February 16, the Chairman of the Public Accounts Committee set out comments on three chapters in the Director of Audit's Reports, viz. Administration of the Direct Subsidy Scheme and governance and administration of Direct Subsidy Scheme schools, residential treatment and rehabilitation services for drug abusers, and the Community Investment & Inclusion Fund.
 
We accept the committee's recommendations. I would like to highlight key measures we have taken.
 
Direct Subsidy Scheme schools
The administration agrees the recommendations made by the committee on the administration of the Direct Subsidy Scheme and the governance and administration of Direct Subsidy Scheme schools are conducive to the sustained improvement to the implementation of the scheme. We also consider the recommendations can help Direct Subsidy Scheme schools attain good governance.
 
In response to the committee's concerns and recommendations, the Education Bureau has been taking follow-up action on two levels. First, the bureau has followed up on the malpractices and irregularities identified in individual Direct Subsidy Scheme schools and as of now most of the cases have been settled. Second, the focus is being placed on improving the mechanisms at both the operational and system levels.
 
Regarding the improvement measures at the operational level, the bureau has put in place a systematic risk analysis mechanism whereby different aspects of schools will be taken into account for selecting schools for audit purpose in order to improve the existing monitoring mechanism. The bureau has also stepped up measures to closely monitor and follow up with schools to ensure they have promptly and properly rectified the malpractices identified in audit inspections. These measures include conveying the findings to the school management committees, incorporated management committees and conducting follow-up audit inspections. In addition the bureau will further strengthen its internal co-ordination and communication mechanism.
 
In future, an annual report summarising the findings of the annual audited accounts submitted by Direct Subsidy Scheme schools and the audit inspections conducted by Education Bureau officers will be tabled for discussion by a standing task force chaired by a Deputy Secretary for Education. This will enable the Education Bureau to have a holistic view of the financial arrangement of Direct Subsidy Scheme schools and ensure schools will follow up various improvement measures effectively and comply with the relevant provisions in a timely manner.
 
At the same time, the bureau will improve the mechanism for reporting key issues relating to Direct Subsidy Scheme schools to the Secretary and the Permanent Secretary, and will carry out the improvement measures progressively.
 
Regarding the improvement measures at the system level, the bureau is guided by the need to enhance transparency, governance and communication of Direct Subsidy Scheme schools. The Working Group on Direct Subsidy Scheme, chaired by the Permanent Secretary for Education, has been set up for this purpose.
 
The Working Group comprises six members from the private sector with expertise in corporate governance, financial and human resource management as well as other relevant experience, and four subject officers from the bureau. The Working Group’s major responsibilities are to review the administration of the Direct Subsidy Scheme as well as the governance and administration systems of Direct Subsidy Scheme schools, and to recommend measures for their continuous improvement.
 
The Working Group has already started its work and its priority is to explore feasible measures to improve the existing mechanism for monitoring Direct Subsidy Scheme schools' implementation of their school fee remission/scholarship schemes, with a view to ensuring no students, including those receiving Comprehensive Social Security Assistance, will be deprived of the opportunity to attend Direct Subsidy Scheme schools because of financial difficulties.
 
Other issues to be reviewed by the Working Group include the governance structure, internal control, financial management, and the school fee remission/scholarship schemes of Direct Subsidy Scheme schools. The Working Group will also seek views from Direct Subsidy Scheme schools and other stakeholders, and will submit its report to the Secretary for Education by the end of 2011. In the meantime, the Education Bureau will report progress to the Panel on Education.
 
Services for drug abusers
The administration accepts the comments of the Public Accounts Committee in respect of the residential treatment and rehabilitation services for drug abusers.
 
As always, the administration strives to deal with anti-drug policies and co-ordination effectively at an appropriate level. The Narcotics Division, under the leadership of the Secretary for Security, is responsible for policy formulation and co-ordination across bureaus/departments and with the non-governmental organisation sector. 
 
As and when necessary, leadership would be taken up at even more senior levels, as in the case of the Task Force chaired by the Secretary for Justice in 2007-08, and the escalated community-wide anti-drug campaign led personally by the Chief Executive in 2009.
 
An inter-departmental working group led by the Security Bureau and involving key government parties has been in place and strengthened.
 
To tackle the gradual shift from heroin to psychotropic substances in the drug abuse trend especially among youngsters, the Government has since 2008-09 substantially enhanced treatment and rehabilitation services. From 2011-12, the additional recurrent provision amounts to some $140 million per annum.
 
As part of its contribution to collaborative efforts across the administration, the Education Bureau has increased by 40% the level of subvention to education programmes for school-aged drug abusers receiving residential treatment. 
 
In respect of voluntary residential services, 39 out of the 40 treatment centres have re-engineered their programmes to serve psychotropic substance abusers, who have become the major users of the centres. We are actively taking steps to assist the remaining one to re-engineer its services and improve its utilisation.
 
To address committee concerns about uneven workload among centres, the Social Welfare Department updates probation officers on a quarterly basis the centres' occupancy rates and programmes, which may help them draw up recommendations of an appropriate centre for a probationer. Social Welfare Department is also monitoring on a monthly basis the probationers' waiting time for the centres.
 
On information sharing, the department has since April 2011 started to share with the Education Bureau every six months statistics collected during licensing inspections, which help provide a general overview on the distribution of school-aged drug abusers residing in treatment centres.
 
In respect of treatment centres on government land/premises, the Lands Department has completed inspection of all 11 centres which have land grants or tenancy agreements, and confirmed with relevant departments support for their continued use for drug treatment purposes. Among them, two have low utilisation rates, and the department has followed up with the NGOs concerned.
 
Regarding new applications for land grant or tenancy for treatment centre purpose, in future, the Lands Department will consult relevant bureaus or departments and include appropriate conditions in the land documents to ensure proper control and monitoring.
 
The administration has continued to step up its efforts to assist the centre operators regarding licensing issues. We look forward to two treatment centres obtaining a full licence within the year, to be followed by another five in 2012.
 
To provide more adequate funding support to treatment centres in their redevelopment and reprovisioning projects, a new Special Funding Scheme under the Beat Drugs Fund will be launched shortly, raising the maximum amount of grant per project from $3 million to $50 million. The funding scope will also be expanded to help operators expedite the planning and construction processes.
 
Community Investment & Inclusion Fund
We thank the Public Accounts Committee for its views and recommendations on improving the governance and administration of the Community Investment & Inclusion Fund as set out in its Report. The Labour & Welfare Bureau is taking follow-up actions together with the Community Investment & Inclusion Fund Committee and actively implementing the improvement measures to enhance the operation of the CIIF to ensure good governance.
 
We understand the Public Accounts Committee was concerned about the pace of fund disbursement and the number of applications approved under the CIIF. In approving projects, the committee takes into account a number of factors, including the prudent use of public funds and encouragement of creativity and participation of organisations.
 
When the CIIF was first set up in April 2002, the committee had made it clear the seed money would be used to support projects that could foster the development of social capital while one-off activities and projects lacking long-lasting impact would not be supported. When assessing applications, the CIIF Committee will accord priority to the effectiveness of the projects in terms of promotion of multi-partite collaboration and sustainable development of social capital rather than focusing on the number of projects approved.
 
That said, we agree that the CIIF should continue to actively encourage more applications from eligible organisations so as to promote social capital. The CIIF has further enhanced its publicity and promotion efforts. Apart from strengthening co-operation with stakeholders in the districts, the CIIF has commissioned a consultant to conduct a half-yearly brand building exercise with a view to enhancing public understanding and recognition of the CIIF and social capital and encouraging joint participation and implementation of the social capital concept. 
 
The CIIF handles all applications in a fair and impartial manner. To enable applicants to have a better understanding of the CIIF's requirements, the CIIF Secretariat regularly organises briefing sessions, arranges grantees and prospective applicants to share their experience in the good modes of operation and implementation of successful projects, provides individual consultation service for applicants in need as well as reviews from time to time the possibility of streamlining administrative procedures. The CIIF Secretariat has also enhanced support services to grantees, including providing clear guidelines on reporting of project achievements, organising sharing sessions and training workshops, as well as inviting academics to explain the prerequisites for effective implementation of social capital projects and developing effective assessment tools and methods.
 
We note the Public Accounts Committee is concerned about the follow-up reviews upon expiry of the project funding period and the overall evaluation of the effectiveness and future directions of the CIIF. We will devise guidelines and framework for project assessment and put in place a mechanism for following up on completed projects so as to ensure their sustainable development.
 
On the CIIF's effectiveness in social capital development, we have commissioned independent consultants to conduct the second evaluation study on the CIIF which is expected to be completed in early 2012. Taking into account the target, scale and timing of the evaluation study, we are of the view that the independent consultants should continue with their work instead of conducting a self-evaluation in parallel before the completion of the independent evaluation to avoid duplication of resources and ensure the independence of the study. We will actively follow up on the findings of the independent evaluation study and consider the future development of and injection into the CIIF in due course.
 
This is an English translation of the address given by Chief Secretary Henry Tang in response to Public Accounts Committee Report No.55 in the Legislative Council.