The agency subsidising creative projects in Hong Kong has come under fire from a government watchdog for inadequately monitoring how grants from a HK$600 million fund of taxpayers' money are spent.
The Audit Commission also said that CreateHK, the government department which promotes the development of creative industries, was not doing enough to guard against conflicts of interest among panel members vetting grant applications.
Despite having the authority to inspect the books of organisations receiving grants, CreateHK had not done so in the five years of its existence, the commission's report, released yesterday, said.
Set up in June 2009 to subsidise non-profit-making creative projects in such areas as design, digital entertainment, music, publishing and television, the agency had by November last year approved 165 applications totalling HK$323 million.
The report said awardees should keep records for seven years instead of two, as currently required.
It found that records such as balance sheets were missing for some projects, while in other cases documents supporting expenditure could not be found.
Twelve of the 15 projects examined also did not keep a designated bank account while HK$580,000 in unspent funds from the 15 projects was not returned to the government.
Site visits to monitor projects were few and brief, project completion reports were often late or missing and information reported by awardees was not verified.
The report said the agency had also failed to take adequate action in requiring members of its vetting committee to hand in a declaration of interests.
Many members of the committee failed to hand in their declarations because they were sent the forms only one to six days before their terms began, the report revealed.
In one case, the chairperson of an assessment panel set up in May last year did not hand in the declaration until February this year when the Audit Commission raised the issue.
Project papers were also sent out to members who hadn't declared their interests.
"CreateHK needs to ensure that project documents are only circulated to members who have … declared no conflict of interest with the projects concerned," the report said. It also said that CreateHK needed a better system to identify repeat projects.
CreateHK agreed with the recommendations of the audit.