Productivity Council takes beating

PUBLISHED : Thursday, 26 November, 2009, 12:00am
UPDATED : Thursday, 26 November, 2009, 12:00am

The latest report by the Audit Commission has raised questions about the management at the Productivity Council, pointing to concerns over the salary of its top boss and how staff bonuses were handed out.

The report, one of several the commission releases twice a year on various government departments and public bodies, also said more than HK$57 million worth of inventory was missing and that the council had left thousands of feet of office space vacant.

It found that executive director Wilson Fung Wing-yip was receiving more pay than he was entitled to and that the council board did not formally approve a change he made to his employment contract.

The change involved an addition to his contract that gave him a salary adjustment last year of 6.48 per cent, rather than the 6.3 per cent that is applicable in the civil service.

Fung also received a cash allowance as a housing benefit on top of his salary. But the audit found out that the council's board, which approved the package, was not made aware of rules that say policy officers should get less housing allowance if they had already received the benefit in a previous job.

According to the council's annual reports, the executive director received HK$1.81 million in 2007, HK$2.83 million last year and HK$3.02 million this year.

The Innovation and Technology Commission, which oversees the council, told the Director of Audit that the changes to Fung's package were acceptable.

The audit found that three senior staff had also received cash allowance as their housing benefits, but the amount should have been reduced according to the council's rules.

Although the allowances were given with the staffing committee's approval, the Director of Audit queried that the committee had not been given sufficient background to make an informed choice.

The audit also criticised the council's human resources practices. Two staff who were appraised as delivering 'substandard' performance were awarded the same bonus that was paid to those rated as 'best' or 'good.'

Five professional-grade staff appraised as 'steady' received the highest amount of bonus, more than five others who were appraised to be 'best.'

The audit report suggested that the bonus should be consistent with the staff's performance.

The Director of Audit also identified a number of administrative practices that needed to be shaken up. A total of 13,600 sq ft of council office space had been left vacant. Of this, 5,200 sq ft of space had been vacant for more than a year; and another 400 sq ft that was reserved for licensing to industries had been left vacant. The space was worth a total of HK$5.4 million in rent per year, the report said.

The audit report also said the council had not been careful in minding all its assets. Up to 9,000 computers, audio-visual items and pieces of laboratory equipment worth more than HK$57 million were missing from council's various inventory checks.

The commission also suggested the council had failed to achieve the statutory objective of avoiding incurring losses in its overseas efforts. Two subsidiaries in Guangzhou and Dongguan had incurred an accumulated operating loss up to HK$2.34 million and HK$4.17 million, respectively.

As the organisation recovered only 58 per cent of the staff cost and overhead from the projects it carried out on the mainland, as a result, about HK$2.17 million was written off as project cost 'discount.'

Board chairman Clement Chen Cheng-jen said the audit department's recommendations were 'useful' as they 'fit nicely with the ongoing reform currently being undertaken'. He said the council conducted two consultations in 2006 to review its policies and practices in the areas of purchasing, administration and human resources. Most of the recommendations had been implemented.

Down the drain

The big numbers related to the Productivity Council from the audit report (HK$)

Accumulated loss of two Guangdong subsidiaries since 2003-04: $2.34m

Excessive cost and overheads of projects carried out on mainland: $2.17m

Total cost of 9,085 lost computers, audio-visual and laboratory equipment: $57.1m

Rental value of vacant office space not let: $5.4m

Value of assets given to staff that should be recovered: $2,724

Overpayment of building management fees: $1.1m

Annual rental cost of unnecessary post box: $650

Total amount of public funding lost: $68.13m