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

of income and key expenditure items. Staff, for instance, may wish to know theexpenditure on staff remuneration for comparison with the additional fundingprovided by the SWD for pay adjustments. We believe that the disclosure of theAFR would strike a balance between monitoring the use of public funds andmanagement flexibility.Recommendation 28A formal public accountability framework should be in place for NGOs to disclosetheir AFRs as submitted to the SWD, so that they will also be accountable to thepublic for the proper and prudent use of public funds.6.25 Recent press reports have also noted concerns in the community regardingthe lack of transparency of NGO financial affairs. For example, a survey conductedby the South China Morning Post revealed that only seven of the 30 welfare NGOsthat received the highest amount of Government subventions were willing to disclosetheir chief executives’ salaries 5 .6.26 In this connection, the IRC notes that the Government promulgated a set ofguidelines in 2003 which require that subvented bodies receiving more than$10 million a year from the Government, and where such amount accounts for morethan 50% of their operating incomes, should review their senior staff’s number,ranking and remuneration each year, unless otherwise exempted by virtue of theirspecial circumstances. It was further promulgated that each subvented body’sreview report should set out the up-to-date position in respect of the number, rankingand remuneration packages of staff at the top three-tiers, and also explain and justifyany changes over the period covered in the report. The updated position should bereported to the relevant Director of Bureau, who should then assess itsappropriateness by referring to comparable jobs in the civil service or to marketpractices. He should also work out with the subvented bodies suitable arrangementsfor public disclosure of their regular reviews. With the implementation of the newguidelines, the “no better than” subvention principle was removed.6.27 Prior to the publication of the above guidelines, the SWD had agreed withthe welfare sector an elaborate set of rules and guidelines for the subvention of NGOsfunded on LSG. They are documented in the LSG Manual and cover aspects such asthe administration of the LSG, as well as financial management and public5 <strong>Report</strong>s of 28 July 2008.- 84 -