The Audit Commission has criticized the Consumer Council, saying the council has failed in a number of ways dating back the last couple of years.

The audit director questioned yesterday the findings of a council study from February 2006 that focused on bank interest rates.

The research concluded that banks were quick to raise interest rates but slow to reduce them.

Controversy was later raised as two local newspapers published editorials criticizing the council for being unfamiliar with the operations of the money market. An academic also criticized the council in another local newspaper.

The council responded to the editorials, but not the academic.

The Audit Commission found that the council's research hadn't obtained the approval of its research-and-testing committee, which is required under council guidelines for projects involving sensitive issues.

"As the study was prompted by public concern in a time of interest rate hikes, the conduct of such a study would likely involve sensitive issues of great public interest," the commission report said. "Therefore, it would have been prudent for the project proposal to be submitted to the research and testing committee for approval."

The commission concluded that the controversy resulting from the project would not be conducive to helping the public make an informed decision.

The commission urged the council to engage consultants' assistance for complex and technical subjects.

Meanwhile, the council's price survey, which was recently expanded to be published on a weekly basis to help ease inflation, was also questioned by the commission.

The commission found that the launching and expanding of the price survey wasn't handled using the council's strategic-planning process.

The council's administration was also criticized. The investigation found that the requisitions for four procurements, out of 25, were obtained after the goods or services were purchased.

The council was also found to have procured all air tickets for business travels from the same travel agent without obtaining quotes from other agents.

The council has accepted the audit findings. It said it will consider adding the price survey in its strategic plan and asked its staff to document quotations for procuring air tickets since March 2008.

(HK Edition 11/27/2008 page1)