Home Affairs Bureau says HK$10 million were donations, not public money

The Home Affairs Bureau released a statement on Wednesday evening defending the government's spending on the 2009 East Asian Games (EAG).

Earlier in the day, the Legislative Council (LegCo) Public Accounts Committee (PAC) called for a better system for managing budgetary changes involving major events.

The call came as the committee criticized the government's failure to ascertain the full and direct cost of the 2009 EAG when it sought funding approval from the Finance Committee.

Secretary for Home Affairs Tsang Tak-sing offered a brief response after release of the PAC report.

He said the government had hosted a highly successful EAG while maintaining strict adherence to fiscal prudence. "We will study the comments of the PAC carefully and make appropriate responses," he told the press.

In a subsequent statement, the Home Affairs Bureau also defended spending HK$10 million in surplus EAG funds without the Finance Committee's approval.

It said the money arrived in the form of donations that were received after the Games and it could clearly be differentiated from government funds.

The allocation of HK$10 million for the promotion of sports did not involve public money, the bureau said, adding that the arrangement was lawful, reasonable and rational.

The PAC contended that the use of the money without the backing of the Finance Committee was inappropriate.

The surplus, which included two donations totaling HK$9.8 million, was used to launch a legacy project for the development of local athletes, the government said.

PAC Chairman Philip Wong presented a report of the open hearings on the EAG accounts to LegCo on Wednesday.

In his submission, Wong said the Home Affairs Bureau estimated in its funding proposal to the Finance Committee that the gross expenditure for the EAG would be HK$240 million.

The total expenditure proved to be HK$291.1 million.

That sum did not include additional direct expenditure of HK$132.8 million on the project, accumulated by various government departments.

"The PAC is gravely dismayed and finds it unacceptable that when the bureau sought funding, it had neither ascertained the full cost implication nor informed the Finance Committee of it," he said.

It added that the government should have informed the Finance Committee of the full cost implications of hosting the event, particularly the full direct costs.

The committee urged the Secretary for Financial Services and the Treasury K.C. Chan to establish a mechanism to require responsible departments to keep the LegCo informed of updated income and expenditure estimates.

At the open hearing in May, the home affairs secretary argued that in 2006 the Finance Committee had already approved the government commitment to the EAG for HK$123 million.

The EAG Company not only made ends meet but also recorded a surplus of HK$10 million as the expenditure was just HK$110 million, he said.

After presenting his report, Wong said the PAC felt that the HK$132.8 million borne by government departments should have been counted as an additional direct cost but the government disputed that conclusion.

joseph@chinadailyhk.com

China Daily

(HK Edition 07/07/2011 page1)