Value for money audit
Value for money audit is
- an examination into the economy, efficiency and effectiveness with which the audited body has discharged its functions;
- carried out under a set of guidelines, agreed between the Public Accounts Committee and the Director of Audit and accepted by the Government. The guidelines were tabled in the Provisional Legislative Council by the Chairman of the Public Accounts Committee on 11 February 1998;
- conducted in accordance with a programme of work determined annually by the Director of Audit; and
- performed using a structured approach.
Key performance measures in respect of value for money audits for 2024-25 are:
| Targets | |
|---|---|
| Number of Director of Audit's Reports submitted to the Legislative Council | 2 |
| Number of value for money audit reports issued to audited bodies | 16 | Indicators |
| Number of man-hours spent | 168,191 |
| Provision for value for money audit as % of total government spending | 0.017% |
Audited body — any bureau of the Government Secretariat, department, agency, other public body, public office, or audited organisation.
Audited organisation shall include:
- any person, body corporate or other body whose accounts the Director of Audit is empowered under any Ordinance to audit;
- any organisation which receives more than half its income from public moneys (this should not preclude the Director from carrying out similar examinations in any organisation which receives less than half its income from public moneys by virtue of an agreement made as a condition of subvention);and
- any organisation the accounts and records of which the Director is authorised in writing to audit by the Chief Executive in the public interest under section 15 of the Audit Ordinance.
A summary of the guidelines tabled in the Provisional Legislative Council by the Chairman of the Public Accounts Committee on 11 February 1998 is as follows:
The Director of Audit:
- has great freedom in presenting his reports but he will not comment on policy decisions of the Executive and Legislative Councils except their effect on the public purse;
- may investigate and report to the Legislative Council on whether there was a lack of sufficient, relevant and reliable financial and other data available and whether critical underlying assumptions were made explicit when the policy objectives or decisions were made, for further inquiry by the Public Accounts Committee.
The Director of Audit may also:
- consider the authority upon which the policy objectives have been determined, and policy decisions taken;
- consider whether there are satisfactory arrangements for considering alternative options in the implementation of policy;
- consider as to whether established policy aims and objectives have been properly implemented;
- consider as to whether there is a conflict between different policy aims or objectives, or between the means chosen to implement them;
- consider how far policy aims and objectives have been translated into operational targets and measures of performance and whether the costs of alternative levels of service and other relevant factors have been considered, and are reviewed as costs change; and
- be entitled to exercise the powers given to him under section 9 of the Audit Ordinance.
Structured approach — basically, the audit consists of three stages, i.e. the planning stage, the investigation stage and the reporting stage. At the end of the review, we aim to produce a report to the audited body for comment. This report is subject to stringent quality checks to ensure as far as possible that the report contents are accurate, complete, balanced, fair and constructive.
Follow-up actions — the Director of Audit keeps in view the development of subjects included in his Reports. For subjects selected for investigation by the Public Accounts Committee, the Director of Audit conducts an annual clearance exercise to inform the Committee of the latest developments of issues raised in the Public Accounts Committee's Reports. For subjects not selected for investigation by the Public Accounts Committee, the Director of Audit calls for separate progress reports from the auditees concerned directly on a half-yearly basis, and reviews the latest developments.