Report of the Public Accounts Committee on Report No. 77 of the Director of Audit on the Results of Value for Money Audits
MR CHAN CHUN-YING (in Cantonese): President, on behalf of the Public Accounts Committee (“PAC”), I submit the P.A.C. Report No. 77. This report covers all the eight chapters in the Director of Audit’s Report No. 77 (“the Audit Report”) and takes stock of the progress of the action taken by the Administration on the matters referred to in the previous two reports of PAC.
PAC held public hearings to examine in detail the two chapters of the Audit Report that involved issues of a more serious nature; as for the remaining six chapters, the relevant Policy Bureaux, departments and organizations have responded to PAC’s concerns in writing at its request.
The two chapters on which PAC held public hearings are “Chapter 1: Highways Department: Maintenance of public footpaths” and “Chapter 6: Safeguarding employees’ rights and benefits under labour laws”. I will briefly report on the conclusions and recommendations of these two chapters.
Chapter 1 of the Audit Report pointed out that the contractors of the Highways Department (“HyD”) failed to identify and record 183 defects during the routine inspections on 35 public footpaths, of which 14 defects might cause dangers to road users and require immediate rectification. PAC expresses grave concern about the situation and considers that HyD has failed to effectively monitor the contractors’ inspection and maintenance of public footpaths. PAC urges the Policy Bureau responsible for overseeing the operations of HyD to ensure that HyD effectively monitors the contractors’ performance. PAC also urges HyD to strengthen the monitoring of contractors and enforce penalties, and require the contractors to keep a record of all defects identified during routine inspections to facilitate timely rectification.
Furthermore, PAC is also gravely concerned about HyD’s overestimation of the costs of six completed rehabilitation projects for public footpaths, ranging from 27% to 200%. In addition, HyD took 5 to 31 months to delete the six completed rehabilitation projects from the block vote after making final payment to the contractors. In four of these projects, HyD staff had not yet released the unused funds 12 to 24 months after respective approvals to delete the projects from the block vote were obtained, resulting in lock-up of such unused funds which could have been used for other projects.
PAC strongly urges HyD to improve the accuracy of its estimation of relevant costs as far as practicable and promptly release unused funds upon completion of works, with a view to creating a culture of prudent fiscal management.
In Chapter 6 of the Audit Report, PAC noted that for some applications for the Protection of Wages on Insolvency Fund (“PWIF”) approved between 2018 and 2021, the percentage of applications with time elapsed of more than one year from the dates of receipt of applications by the Labour Department (“LD”) up to the dates payment was effected increased from 5% in 2018 to 21% in the first six months of 2021. Expressing grave concern and dissatisfaction, PAC considers that LD’s inadequacies in processing applications have undermined the intent of PWIF to provide timely relief to the affected employees.
PAC expects that LD will take various measures to expedite the processing of PWIF applications, in particular, to make an early implementation of the initiatives to engage legal professionals or to provide legal service to assist employees in filing a bankruptcy or winding-up petition against the employers concerned; and to explore ways to expedite the signing of the “Statement of Inability to Pay” by the employers concerned with a view to speeding up the PWIF application process.
PAC also expresses serious concern about LD’s failure to strictly enforce the PWIF Board’s subrogation right against employers to recover the ex gratia payments granted to its ex-employees in order to safeguard PWIF against abuse. PAC strongly urges LD to make every effort to recover the payments from the employers concerned and to closely monitor the effectiveness of the relevant measures.
PAC also expresses serious concern about LD’s failure to strictly enforce the PWIF Board’s subrogation right against employers to recover the ex gratia payments granted to its ex-employees in order to safeguard PWIF against abuse. PAC strongly urges LD to make every effort to recover the payments from the employers concerned and to closely monitor the effectiveness of the relevant measures.
I so submit.