Review Report on the Lump Sum Grant Subvention ... - lwb.gov.hk

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enchmark level. Two-thirds of the NGOs, however, had a funding level below thebenchmark at the time of joining the LSGSS. They received an immediate increasein funding up to the benchmark level. Although the 2% adjustment processmentioned above was originally scheduled to start in 2006-07, actual implementationwas deferred twice and did not commence until 2008-09.1.8 Under the LSGSS, NGOs can retain unspent funds in a reserve to meetfuture liabilities. The reserve (including interest income but excluding PF reserve) iscapped at 25% of the annual operating expenditure of the NGO. Any amountabove the 25% cap has to be returned to the Government in the following financialyear, unless the NGO has applied to, and obtained the permission of, the Director ofSocial Welfare (DSW) to lift the cap. The reserve can be used at the discretion ofNGOs on activities related to the Funding and Service Agreements (FSAs) they signwith the SWD and relevant support services, but PF reserve can only be used for PFexpenses.1.9 The formula for calculating the LSG as well as other general rulesgoverning the LSGSS are set out in the LSG Manual. It is an agreement between theGovernment and the NGOs concerned, and is binding on both. It also containsguidelines for NGOs on good management practices and processes. As such, it isintended as a useful reference for all stakeholders under the LSGSS.1.10 An important feature of the LSGSS is the shift from input control to outputmeasurement. The Service Performance Monitoring System (SPMS), which wasalready in place before the introduction of the LSGSS and further improved down theroad, measures each NGO’s performance in terms of output requirements and servicestandards, against the FSAs and the Service Quality Standards (SQSs) that the SWDstipulates.1.11 To monitor the implementation of the LSGSS, a Lump Sum Grant SteeringCommittee (LSGSC) was established in 2001. It is chaired by the DSW andcomprises representatives of the NGOs’ management, staff unions and service users.1.12 There is much more to the LSGSS than determining the benchmark orputting in place the LSG Manual, the SPMS and the LSGSC. The flexibility in staffremuneration and the use of resources, the scope for re-engineering, the call on theNGOs’ accountability and corporate governance, etc. are also pertinent issues inimplementing the system. They will all be examined in greater detail in the- 3 -
following chapters. In summary, the LSGSS seeks to simplify the subventionarrangements by devolving much of the operational and resource managementdecisions to the NGOs, while ensuring proper use of public funds and satisfactoryservice provision through setting mutually agreed accounting rules and servicestandards.1.13 Currently, subvented NGOs are providing about 80% ofGovernment-funded social welfare services in Hong Kong. As at 1 August 2008,162 out of the 173 subvented NGOs had opted to join the LSG subvention mode on avoluntary basis. The total LSG subvention to these 162 NGOs in 2008-09 isestimated to be about $8 billion, which accounts for over 99% of the Government’srecurrent subvention on welfare in the year, and represents a 36% increase over theLSG subvention of $5.9 billion in 2001-02.Developments since 20011.14 The LSGSS today is largely the same as that in 2001. A number offacilitating measures have been introduced over the years to help NGOs in itsimplementation, some of which having a lasting impact on the system. A distinction,however, has to be made between circumstantial changes which affect theimplementation of the LSGSS and modifications to the system itself, although theyare often intertwined.1.15 A case in point is the Government’s decision to pursue the EnhancedProductivity Programme (EPP) and Efficiency Savings (ES) which, though not anintrinsic part of the LSGSS and not unique to the welfare sector, posed a majorchallenge to NGOs which were trying to adjust to the new funding mode at that time.The cumulative impact of these parallel developments on NGOs under the LSGSSwas significant enough to justify repeated Government intervention and substantialfunding injections into the system, as described in the ensuing paragraphs.EPP and ES1.16 At the turn of the century, the Government was under tremendous financialpressure. The entire public sector, across-the-board, was required to meet a recurrentsavings target of 5% within three years’ time, from 2000-01 to 2002-03. Thisinitiative was known as EPP because it was expected that the bulk of savings wouldbe achieved through service re-engineering which enhanced efficiency in the use of- 4 -
Page 1: Review Rep
Page 5 and 6: ANNEXES1. Stakeholder groups which
Page 7 and 8: Government, NGOs, staff, service us
Page 9 and 10: 10. Feedback is essential for the i
Page 11 and 12: issues. The resources thus released
Page 13 and 14: (c) where a project is carried out
Page 15: NGO to run a particular service, it
Page 19 and 20: Staff and had sufficient time to ad
Page 21 and 22: major events described above would
Page 23 and 24: 1.31 Shortly after its formation, t
Page 25 and 26: Chapter Two --- Overall Assessment2
Page 27 and 28: enhancement. Greater autonomy and f
Page 29 and 30: and community sectors are redefined
Page 31 and 32: to develop their own human resource
Page 33 and 34: 3.12 More importantly, the civil se
Page 35 and 36: Recommendation 2The Government shou
Page 37 and 38: adjustments in accordance with thei
Page 39 and 40: sector-wide transition scheme as pr
Page 41 and 42: 3.40 The IRC considers that contrac
Page 43 and 44: 3.47 IFSCs run by the SWD function
Page 45 and 46: Table 3: Wastage rates (C) of socia
Page 47 and 48: e detrimental to the professional d
Page 49 and 50: Chapter Four -Financial Issues and
Page 51 and 52: their services, and indeed a large
Page 53 and 54: Recommendation 7In view of the chan
Page 55 and 56: LSG reserves4.21 Before the introdu
Page 57 and 58: of staff. NGOs are encouraged to be
Page 59 and 60: Recommendation 11NGOs should fully
Page 61 and 62: 4.42 Indeed, the re-engineering eff
Page 63 and 64: 4.52 The LSGSC is an important plat
Page 65 and 66: the LSG, the PF provision for Snaps
Page 67 and 68:
stakeholders which look to the manu
Page 69 and 70:
Recommendation 16The SWD should rat
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edirected and innovative thinking e
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SWD’s audit procedures5.8 Many NG
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about the parameters set by the SWD
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Recommendation 20The SWD should rev
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with an annual subvention of more t
Page 81 and 82:
to form federations or jointly prov
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The figures do seem to support the
Page 85 and 86:
their existing services.existing on
Page 87 and 88:
5.52 Many BIPs have indeed helped N
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Chapter Six -Accountability and Cor
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2001-03 : Issued booklets on five b
Page 93 and 94:
practice guidelines currently avail
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6.17 Chapter 4 of the LSG Manual on
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of income and key expenditure items
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cherished no less in the welfare se
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ief, it monitors NGOs' performance
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7.11 Frontline staff have also poin
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planning mechanism described in the
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(iii) have obtained SWD’s prior a
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Chapter Eight - Handling of Complai
Page 111 and 112:
ight of appeal or objection or a re
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Underinvestigation4 17 16 37Total :
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community will expect intervention
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eferral unreasonable.8.27 The IRC h
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Chapter Nine - Related Issues9.1 Th
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eplenishment of F&E items costing n
Page 123 and 124:
eliance on their professional certi
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contracts or had not yet joined the
Page 127 and 128:
additional resources, not only can
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Chapter Ten - Recommendations10.1 T
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passion of the many people we have
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Chapter 5(17) The SWD should conduc
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e informed of the ICHC’s decision
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Annex 1Page 2 of 343. Hong Kong Alz
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Annex IIPage 0 of 8Report</
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Australian system at that time.Anne
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Annex IIPage 4 of 8Hong Kong 2008-0
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Annex IIPage 6 of 8in reducing the
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Annex IIPage 8 of 8is consistent wi
Page 149 and 150:
Annex 3Page 2 of 26. 終止合
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Annex 6Page 1 of 1Flowchart on how
Page 159 and 160:
Page 2 of 9Chief Executive announce
Page 161 and 162:
Page 4 of 9services operated by NGO
Page 163 and 164:
Page 6 of 9Lump Sum Grant Steering
Page 165 and 166:
Page 8 of 9Social Welfare Advisory
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