The University has a sound financial management system for the proper and effective management of its financial resources, ensuring public accountability and compliance with statutory, professional and external requirements in financial reporting.
The University observes the principle of prudent financial management and adopts a realistic budget strategy to ensure financial viability and sustainability to support the University’s core mission and strategic development.
The University has in place a robust internal financial control system with due consideration to risk management in order to ensure proper management, control, allocation, utilization and reporting of UGC and University funds.
UGC Requirement
The University complies with the specific requirements set out by UGC in its Notes on Procedures, which include the Statement of Recommended Practice for the UGC-Funded Institutions and the Cost Allocation Guidelines for UGC-funded and non-UGC-funded Activities. The Council has the ultimate responsibility to ensure compliance with UGC requirements.
Budgeting and Financial Control
The University Budget is prepared on a realistic basis, considering the approved government subventions and planned activities including capital projects. The budget supports the strategic focus and operating requirements of the University, using a three-year roll-over planning cycle approved by the Council with the endorsement of the Finance Committee and the Executive Committee. A half-yearly review of the current year budget ensures that income and expenditure are in line with the approved budget, allowing for the timely deployment of potential resource savings and enabling necessary adjustments when discrepancies are found.
The Finance Committee of the Council is delegated with the authority to deal with matters which have important financial implications. The Finance Committee advises the Council on Management’s proposals in respect of triennial estimates and annual budgets, as well as on the preparation of annual audited financial statements. Significant accounting policies of the University are set out in Note 1 of the University’s Annual Financial Report.
The Audit Committee of the Council reviews the annual audited financial statements and the key audit findings with the external auditor before submission to the Council for approval. The Committee advises and reports directly to the Council to ensure effective implementation of appropriate controls to address identified risks.
The Resources Advancement and Management Committee steers and oversees all aspects of the development and deployment of the University’s financial resources. Heads of the Unit (HoUs) are responsible for the overall financial management of their respective Units. The Central Management Team and HoUs will engage members of the relevant committees[1] and seek their approval in accordance with the University policy, when making key decisions/recommendations related to financial management and budget allocation within their units, such as fund transfer to projects/departmental activities, and spending on non-staffing items.
Investment
The University upholds investment governance through the Investment Committee of the Council which is responsible for formulating investment strategies in accordance with the University Council’s approved Statement of Investment Policies and Guidelines which is reviewed regularly.
The University investment is managed prudently with appropriate risk controls through cash flow planning and projection, established rules governing the selection of investment counterparties with reference to their performance, financial strength and/or credit rating, diversified asset allocation, portfolio performance reporting and monitoring. The Investment Committee also conducts regular review and monitoring of the performance of investment managers.
Procurement
The University has in place a Purchasing Policy to ensure that goods and services are obtained at the best value for money in a publicly accountable and impartial manner, irrespective of the funding source and purchase value.
The University adopts the following principles with regard to purchase of goods and services, handling of tenders and award of contracts:
| • | avoidance of conflict of interest; |
| • | segregation of duties among departmental buyers, end-users and goods receiving personnel; |
| • | compliance with all applicable laws in Hong Kong, including but not limited to the Prevention of Bribery Ordinance and the Personal Data (Privacy) Ordinance; and |
| • | compliance with regulations and guidelines imposed by the UGC, Government departments, and funding organizations, wherever applicable and appropriate. |
| [1] | Department Management Committee for Academic Unit, School Management Committee for Schools, Unit Management Committee for Other Budgetary Units, and Resources Advancement and Management Committee for the President, Deputy President and Provost, and Executive Vice President. |
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