AUDIT ORDINANCE

AUDIT ORDINANCE

LAWS OF HONG KONG

AUDIT ORDINANCE

CHAPTER 122





CHAPTER 122

AUDIT ORDINANCE

ARRANGEMENT OF SECTIONS

Section Page

1. Short title ..........................2
2. Interpretation .......................2
3. Appointment of Director ..............3
4. Tenure of office of Director ........................................ 3
4A. Salary of Director ...................3
5. Director's employment as public officer 4
6. Filling of vacancy in office of Director 4
7. Acting appointment to office of Director 4
8. Duties of the Director ................4
9. Powers of the Director ................5
10. Appointment of staff of the Director . 6
11. Submission of annual accounts by the Director of Accounting Services to the
Director ............................6
12. Examination and audit of annual statements by the Director and submission
of report to the Governor ................6
13. Director's report of serious irregularities to the Governor 7
14. Audit, examination or inquiry into the accounts of bodies corporate, etc.
authorized by Ordinances ............ 8
15. Audit, examination or inquiry into the accounts of persons, bodies corporate,
etc. under the Governor's authority . 8
16. Director's certification of accounts and report of accounts of bodies
corporate, etc . .........................9
17. Fees to be determined by the Financial Secretary 9





CHAPTER 122

AUDIT

To provide for the appointment, tenure of office, duties and powers of the Director
of Audit and for the auditing of and reporting on the public accounts and the
accounts of specified persons, bodies corporate and other bodies and for
matters incidental thereto or connected therewith.

[10 December 19711 L.N.166of.1971

Originally 66 of 1971 L.N. 16 of 1977, 60 of 1978, 35 of 1979, 3 of 1983, 49 of 1984, 17 of 1985, R. Ed. 1985, 45 of
1988

1. Short title

This Ordinance may be cited as the Audit Ordinance.

2. Interpretation

In this Ordinance, unless the context otherwise requires-
,,accounting officer' means-

(a) any public officer who is entrusted with

(i) the collection, receipt, custody, issue or payment of public
moneys;

(ii)the receipt, custody, issue, sale, transfer or disposal of, or the
accounting for, any stamps, securities, stores or any other
Government property; or

(iii)any monetary or financial responsibilities connected with or
arising from his official duties; and

(b) the head of the Department in which any such public officer is

employed;
'Director' means the Director of Audit appointed under section 3; and
'public moneys' means-

(a) the general revenue; (Replaced 3 of 1983 s. 43)

(b) any moneys which are accounted for, in whole or in part, in the

books or records of account of-

(i) the Director of Accounting Services;

(ii)the Registrar General in his capacity as the Registrar General, the
Land Officer, the Registrar of Companies, the Registrar of Trade
Marks, the Registrar of Patents, the Official Receiver, the Official
Solicitor or the Official Trustee; or





(iii) the Registrar of the Supreme Court in his capacity as the
Registrar, the Official Administrator or the Master in Lunacy;
and

(c)any other moneys which the Governor may declare in writing to be
public moneys for the purposes of this Ordinance.

3. Appointment of Director

(1) The Governor, with the prior approval of the Secretary of State, shall
appoint a person to be the Director of Audit.

(2) The public officer who, at the date of commencement of this Ordinance,
holds the office of Director of Audit in the Government shall be deemed to have
been appointed under this section.

(3) No person who is appointed under this section as the Director of Audit
shall, while he holds that office, hold any other office of emolument under the Crown
in right of the Government of Hong Kong.

4. Tenure of office of Director

(1)A person who is appointed under section 3 as the Director of Audit(a)
shall hold that office during good behaviour; and

(b) may be-

(i) dismissed from that office; or

(ii) if he has not attained the normal age of retirement of public
officers, required to retire from that office,

only by order in writing by the Governor made with the prior approval
of the Secretary of State.

(2) Where a public officer is dismissed or required to retire from the office of
Director of Audit under subsection (1) a full statement of the circumstances shall be
made at the first opportunity to the Legislative Council.

4A. Salary of Director

(1) Upon the commencement of this section the Governor shall, by order
published in the Gazette, specify the rate of the salary of the Director, and thereafter
the Governor may, from time me to time, by order published in the Gazette, increase
the rate with effect from such date as shall be specified in the order.

(2) The Director shall be entitled to a salary at the rate from time to time
specified under subsection (1).

(3) The salary payable to the Director by virtue of this section shall be charged
on and paid out of the general revenue.

(Added 35 of 1979 s. 2)





5. Director's employment as public officer

Subject to section 4, the Director shall be employed subject to such
Ordinances, Colonial Regulations, administrative rules and conditions of
service as apply generally to public officers.

6. Filling of vacancy in office of Director

When a vacancy occurs in the office of Director of Audit for any reason the
Governor, with the prior approval of the Secretary of State, shall appoint
another person under section 3 to hold that office.

7. Acting appointment to office of Director

If, in the opinion of the Governor, the Director is unable to exercise his
powers or perform the duties of this office during any period for any reason, the
Governor shall appoint another person to act as the Director of Audit during
that period.

8. Duties of the Director

(1) The Director shall examine, inquire into and audit the accounts of all
accounting officers in respect of public moneys, stamps, securities, stores and
any other Government property. (Amended 60 of 1978 s. 2)
(2) The Director shall satisfy himself that-
(a)adequate directions and instructions have been given to ensure
the due collection of public moneys and that the Ordinances
relating thereto and such directions and instructions have been
duly observed by the public officers concerned therewith;
(b)all issues and payments of public moneys were made in
accordance with proper authority;
(e)all payments were properly chargeable and are supported by
sufficient vouchers or proof of payment or otherwise properly
accounted for;
(d)the rules and procedures applied to the issue and payment of
public moneys are sufficient to secure an effective control over
expenditure and that such rules and procedures have been duly
observed by the public officers concerned therewith;
(e)any public moneys appropriated by the Legislative Council for a
specified purpose and expended by a public officer have been
expended in the due application of that purpose and in
accordance with the authority under which the appropriation was
made; and





adequate rules and procedures have been made to ensure the
proper receipt, custody, issue, sale, transfer and disposal of, or
the accounting for, any stamps, securities, stores and other
Government property and that such rules and procedures have
been duly observed by the public officers concemed therewith.
(3) The Director shall not be required to undertake any duty which is, in
his opinion, incompatible with the duties imposed on him by this or any other
Ordinance.

9. Powers of the Director

(1) In the performance of his duties and the exercise of his powers under
this Ordinance the Director may-
(a)authorize in writing any public officer on his behalf to conduct
any inquiry, examination or audit and require such public officer
to report thereon to him:
Provided that any such authority shall be subject to the
concurrence of the head of the Department in which the public
officer is employed;
(b)require any public officer to give such explanation, or to furnish
such information, as the Director may think fit in order to enable
the Director to discharge his duties;
(c)without payment of any fee, cause search to be made in, and
extracts to be taken from, any book, document or record in any
Government Department;
(d)require any person whom he thinks fit to explain any matter
relating to-
(i) the receipt, expenditure or custody of public moneys;
(ii) the receipt, custody, issue, sale, transfer or disposal of, or the
accounting for, any stamps, securities, stores or other
Government property; or
(iii) anything else which is, in the opinion of the Director,
necessary for him to know for the due performance of his
duties and the exercise of his powers under this Ordinance; and
(e) report to the Attorney General any matter which he thinks fit.
(2) In the performance of his duties and the exercise of his powers under
this Ordinance, the Director and any public officer or other person authorized
in writing by him shall have access to all records, books, vouchers, documents,
cash, receipts, stamps, securities, stores and any other Government property in
the possession of any public officer.
(3) In the performance of his duties and the exercise of his powers under
this Ordinance the Director shall not be subject to the direction or control of
any other person or authority.





10. Appointment of staff of the Director

(1) The Governor may appoint other public officers to assist the Director in the
performance of his duties and the exercise of his powers under this Ordinance.

(2) All members of the Director's staff shall be employed subject to such
Ordinances, Colonial Regulations, administrative rules and conditions of service as
apply generally to public officers.

(3) The Director may delegate any of his duties or powers under this Ordinance,
other than the certifying and reporting of accounts, to any public officer.

11. Submission of annual accounts by the Director

of Accounting Services to the Director

(1) The Director of Accounting Services shall, within the period of 5 months, or
such longer period as the Governor may determine, after the close of each financial
year, transmit to the Director-

(a) a statement of the assets and liabilities of the Government;

(b)an annual statement of the receipts and payments by the
Government; (Amended 17 of 1985 s. 2)

(c)a statement of the assets and liabilities of each fund, other than the
Lotteries Fund, established in accordance with section 29 of the
Public Finance Ordinance (Cap. 2); (Replaced 45 of 1988 s. 2)

(d)a statement of the receipts and payments by each fund, other than
the Lotteries Fund, established in accordance with section 29 of the
Public Finance Ordinance (Cap. 2); and (Replaced 45 of 1988 s. 2)

(e)such other statements as the Governor may specify from time to time.
(Added 17 of 1985 s. 2)

(2) (Repealed 45 of 1988 s. 2)

12. Examination and audit of annual statements by the

Director and submission of report to the Governor

(1) On receipt of the statements referred to in section 11, the Director-

(a) shall examine and audit the statements; and

(b)shall, within the period of 7 months after the close of the financial
year, or such longer period as the Governor may determine, prepare
and submit to the Governor as President of the Legislative Council a
report in respect of his examination and audit of the statements and
on any matter relating to the performance of his duties and the
exercise of his powers under

this Ordinance, together with-(Amended60of 1978s. 3)





(i)a copy of the statement of assets and liabilities of the
Government, duly certified by him; (Amended 17 of 1985 s.3)

(ii)a copy of the annual statement of the receipts and payments by
the Government, duly certified by him;

(iii)a copy of each statement of assets and liabilities transmitted to
him under section 11 (1)(c), duly certified by him; and (Replaced 45
of 1988 s. 3)

(iv) a copy of each statement of receipts and payments transmitted to
him under section 11 (1)(d), duly certified by him. (Replaced 45 of
1988 s. 3)

(2) Within the period of 1 month, or such longer period as the Governor may
determine, after the receipt of the report and certified statements from the Director
under subsection (1), a copy of the report and certified statements shall- (Amended 49
of 1984 s. 2)

(a) be laid before the Legislative Council; and

(b) be submitted to the Secretary of State. (Replaced 60 of 1978s. 3)

(2A) Within the period of 3 months, or such longer period as the Governor may
determine, after the laying of the report and certified statements from the Director
under subsection (2)(a), a copy of the report of the Public Accounts Committee of
the Legislative Council shall

(a) be laid before the Legislative Council; and

(b) be submitted to the Secretary of State. (Added49 of 1984s. 2)

(3) Without prejudice to subsections (1), (2) and (2A)- (Amended49of 1984s.2)

(a) the Director may submit to the Governor as President of the

Legislative Council at any time a special report on any matter
incidental to the performance of his duties or the exercise of his
powers under this Ordinance; and (Amended60of 1978s. 3)

(b) the procedure to be followed in respect of such report shall be in

accordance with subsections (2) and (M). (Replaced 49 of 1984
s.2)

13. Director's report of serious irregularities

to the Governor

(1) The Director shall report to the Governor as President of the Legislative
Council any matter which- (Amended60of 1978s.4)

(a) constitutes, in the opinion of the Director, a serious irregularity

in the accounting for-

(i) the receipt, expenditure or custody of public moneys; or

(ii) the receipt, issue, custody, sale, transfer or delivery of any
stamps, securities, stores or any other Government property;
and





(b)comes to his notice in the performance of his duties or the exercise of
his powers under this Ordinance.

(2) The procedure to be followed in respect of a report to the Governor under
subsection (1) shall be in accordance with section 12(2) and (2A) (Replaced 49 of
1984 s. 3)

14. Audit, examination or inquiry into the accounts of

bodies corporate, etc. authorized by Ordinances

(1) Where any Ordinance empowers the Director to audit, examine or inquire
into the accounts of any person, body corporate or other body, the Director

(a)shall have in relation to such person, body corporate or other body,
its members, officers and employees, the same discretion and powers
as are conferred on him by sections 8 and 9 in relation to public
moneys, stamps, securities, stores and any other Government
property; and

(b)may authorize in writing any person publicly carrying on the
profession of accountant or any public officer to audit, examine or
inquire into the records and accounts of such person, body
corporate or other body and require the authorized accountant or
public officer to report thereon to the Director in such manner as the
Director may specify:

Provided that any such authority to a public officer shall be
subject to the concurrence of the head of the Department in which
the public officer is employed.

(2) Any person, body corporate or other body whose accounts have been
audited, examined or inquired into under subsection (1) may be charged such fee (if
any) as may be determined under section 17(1).

15. Audit, examination or inquiry into the accounts

of persons, bodies corporate, etc. under
the Governor's authority

(1) Notwithstanding that he is not empowered by any Ordinance to audit,
examine or inquire into the accounts of a person, body corporate or other body, the
Director may audit, examine or inquire into the records and accounts of any person,
body corporate or other body if

(a)he is authorized in writing to do so by the Governor in the public
interest; and

(b)in the opinion of the Director, such audit, examination or inquiry will
not interfere with the due performance of his duties and the due
exercise of his powers under this Ordinance.





(2) Where the Director undertakes under subsection (1) the audit,
examination of, or inquiry into the records and accounts of any person, body
corporate or other body, he-
(a)shall have in relation to such person, body corporate or other
body, its members, officers and employees the same discretion
and powers as are conferred on him by sections 8 and 9 in
relation to public moneys, stamps, securities, stores and any
other Government property; and
(b)may authorize in writing any person publicly carrying on the
profession of accountant or any public officer to audit, examine
or inquire into the records and accounts of such person, body
corporate or other body and require the authorized accountant
or public officer to report thereon to the Director in such manner
as the Director may determine:
Provided that any such authority to a public officer shall be
subject to the concurrence of the head of the Department in
which the public officer is employed.
(3) Any person, body corporate or other body whose records and
accounts have been audited, examined or inquired into under subsection (1)
may be charged such fee (if any) as may be determined under section 17(1).

16. Director's certification of accounts and report
of accounts of bodies corporate, etc.

(1) Subject to the provisions of any other Ordinance, where the Director
has audited, examined or inquired into the accounts of any person, body
corporate or other body under section 14 or 15 he shall-
(a)if he has audited the accounts of such person, body corporate
or other body, submit to the Governor a statement of such
accounts, duly certified by him; and
(b)prepare such a report (if any) as he may think fit in respect of his
audit, examination or inquiry into the accounts and submit such
report (if any) to the Governor.
(2) If the Director so requests, the procedure to be followed in respect of a
certified statement of accounts or report submitted to the Governor under
subsection (1) shall be in accordance with section 12(2) and (2A). (Replaced
49 of 1984 s. 4)

17. Fees to be determined by the Financial Secretary

(1) Subject to the provisions of any other Ordinance, the fee (if any)
charged for the audit, examination or inquiry into the accounts of any person,
body corporate or other body undertaken by the Director under section 14 or
15 shall-





(a) be determined by the Financial Secretary; (b) be payable by such
person, body corporate or other body; and (c) be paid into the general
revenue.

(2)Subject to the provisions of any other Ordinance, the fee (if any)
payable to an authorized person for the audit, examination or inquiry into the
accounts of any person, body corporate or other body under section 14(1)(b) or
under section 15(2)(b) shall-
(a) be determined by the Financial Secretary; and
(b) be paid from the general revenue.

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