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

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6.15 Some NGOs have requested more guidance on corporate governance, inaddition to what the SWD has already provided. Given that effective corporategovernance is the key to success for NGOs, the IRC recommends that the BestPractice Manual should also address this issue. The manual may provide, inter alia,a clear delineation of the respective roles and responsibilities of the NGO’s governingboard and management, with a view to helping NGOs better segregate duties.6.16 Staff unions and some frontline staff, social work students and service usershave expressed a wish to be on the governing boards of NGOs, so that they mayreflect their views at board meetings and take part in management decisions. Section5.5 of the LSG Manual also advises the NGO Board/ Management Committee to“consult staff on changes that may affect staff.” It is encouraging to note that someNGOs have indeed engaged their staff in implementing reforms. For instance, theirmanagement have taken the initiative to hold consultative sessions and groupmeetings with staff. While the IRC agrees that the input of staff would beparticularly useful in discussions on service delivery and human resourcemanagement strategies, such input may also be obtained through means other thantheir direct participation in the board. The IRC also appreciates that different NGOsmay have different management styles. It would not be appropriate for theAdministration to dictate the governing and management structures of individualNGOs or require all of them to abide by the same set of rules in this regard. Indeed,the SWD, acknowledging NGOs’ autonomy in corporate governance under theLSGSS, has planned to phase out, by the end of this year, its traditional practice ofhaving a liaison officer to sit on some of the NGOs’ boards or managementcommittees. The composition of the governing board, as well as the participation ofstaff and service users in it, will be matters for the NGO to decide having regard to theagency’s own circumstances. As regular and effective communications with staffand service users are very important, the IRC recommends that the sector furtherexamine how this can be done in the context of developing its Best Practice Manual.As per Recommendation 1, a Best Practice Manual should be drawn up for welfareNGOs. It should also address issues in relation to the roles of NGO boards andmanagement under the LSGSS, as well as how frontline staff and service users can beinvolved in the decision making process for important management issues.Financial information disclosure- 81 -
6.17 Chapter 4 of the LSG Manual on “Public Accountability” states that “Whilethe statutory responsibility for the control and management of social welfaresubventions rests with the Director of Social Welfare, a public accountabilityframework has to be put in place to ensure that NGOs receiving Governmentsubventions are accountable, through the Director of Social Welfare, to the public forthe use of public funds”. This principle is reiterated in paragraph 4.9 which statesthat “NGOs receiving LSG and other social welfare subventions are directlyaccountable to SWD and the public for the proper and prudent use of public funds”.6.18 The financial reporting requirements are contained in Chapter 3 of the LSGManual. Specifically, subvented NGOs are required to submit the AFR together witha review report thereon issued by the external auditors in respect of all FSA activities(including their support services to FSA activities), and the audited financialstatements of the NGOs as a whole to the Finance Branch of the SWD not later than31 July following the financial year end of 31 March. The LSG Manual states thatNGOs must ensure that the due date for submission is strictly observed. InChapter 5, we have discussed how and why many NGOs do not adhere to thisdeadline and are given time extensions.6.19 The required format of the AFR is set out in Appendix 6 of the LSG Manual.Note 6 specifies the disclosure requirement for “Personal Emoluments” while note 8specifies the disclosure requirement for “Analysis of Reserve Fund”.6.20 The vast majority of welfare NGOs are incorporated under the Hong KongCompanies Ordinance (Cap.333), and as privately owned companies they are notsubject to any public disclosure requirements. If an exemption from tax has beengranted under Section 88 of the Inland Revenue Ordinance (Cap.112), the NGOswould not be required to complete and file annual Profits Tax returns. However, as amatter of practice, every three years or so, the Inland Revenue Department wouldissue a standard enquiry letter requesting a copy of the latest financial statement andother information to verify that the activities of the NGO conform with the taxexemption.6.21 In the absence of statutory or regulatory requirements, welfare NGOscurrently adopt very different approaches on financial information disclosure. SomeNGOs include financial information as part of their annual reports available to thegeneral public, while others provide no or very minimal financial information in theirannual reports or on their websites. To promote accountability among NGOs, assist- 82 -
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Review Rep
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ANNEXES1. Stakeholder groups which
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Government, NGOs, staff, service us
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10. Feedback is essential for the i
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issues. The resources thus released
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(c) where a project is carried out
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NGO to run a particular service, it
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following chapters. In summary, the
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Staff and had sufficient time to ad
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major events described above would
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1.31 Shortly after its formation, t
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Chapter Two --- Overall Assessment2
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enhancement. Greater autonomy and f
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and community sectors are redefined
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to develop their own human resource
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3.12 More importantly, the civil se
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Recommendation 2The Government shou
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adjustments in accordance with thei
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sector-wide transition scheme as pr
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3.40 The IRC considers that contrac
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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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Page 73 and 74: SWD’s audit procedures5.8 Many NG
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Page 77 and 78: Recommendation 20The SWD should rev
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Page 85 and 86: their existing services.existing on
Page 87 and 88: 5.52 Many BIPs have indeed helped N
Page 89 and 90: Chapter Six -Accountability and Cor
Page 91 and 92: 2001-03 : Issued booklets on five b
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Page 99 and 100: cherished no less in the welfare se
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Page 103 and 104: 7.11 Frontline staff have also poin
Page 105 and 106: planning mechanism described in the
Page 107 and 108: (iii) have obtained SWD’s prior a
Page 109 and 110: Chapter Eight - Handling of Complai
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Page 113 and 114: Underinvestigation4 17 16 37Total :
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Page 121 and 122: eplenishment of F&E items costing n
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Page 129 and 130: Chapter Ten - Recommendations10.1 T
Page 131 and 132: passion of the many people we have
Page 133 and 134: Chapter 5(17) The SWD should conduc
Page 135 and 136: e informed of the ICHC’s decision
Page 137 and 138: Annex 1Page 2 of 343. Hong Kong Alz
Page 139 and 140: Annex IIPage 0 of 8Report</
Page 141 and 142: Australian system at that time.Anne
Page 143 and 144: 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
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Annex 3Page 2 of 26. 終止合
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Annex 6Page 1 of 1Flowchart on how
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Page 2 of 9Chief Executive announce
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Page 4 of 9services operated by NGO
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Page 6 of 9Lump Sum Grant Steering
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Page 8 of 9Social Welfare Advisory
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