The Secretary for Home Affairs has accepted the biennial review reports submitted by the Hong Kong Arts Development Council (HKADC) and the Hong Kong Academy for Performing Arts (HKAPA) since their first submissions in 2003-04. Major findings of the biennial reviews of the two organizations are set out below.

The Hong Kong Arts Development Council

2005-06

During the review period, the structure of the HKADC Administration Office remained unchanged at four tiers (the Chief Executive rank, the Director rank, the Manager rank and the Officer rank). However, the overall staff number in the Administration Office had decreased since 2004-05 after the transfer of the Hong Kong International Film Festival (HKIFF) Office under the HKADC to a new company upon the corporatisation of the HKIFF in February 2004.

In 2005-06, staff at the top two tiers under review included the Chief Executive (equivalent to D2 rank) and two directors (equivalent to Senior Manager, Cultural Services rank). Their remunerations were no better than the corresponding Government packages. The third tier staff comprising Managers (equivalent to Manager/Assistant Manager, Cultural Services rank) were not covered in this review as these ranks are not considered as senior staff in the civil service establishment.

2007-08

During 2007-08, one Manager post was upgraded to a Senior Manager post to head the Planning and Development Department established on 15 October 2007. With the introduction of the Senior Manager rank, the structure of the HKADC Administration Office has increased from four to five tiers, comprising the Chief Executive rank, the Director rank, the Senior Manager rank, the Manager rank and the Officer rank. The remunerations of the four executives including the Chief Executive, the two Directors and the one Senior Manager at the top-three tiers were covered in the review of 2007-08. The number and ranking of these senior posts are considered appropriate. Their pay packages were no better than the corresponding Government packages.

The Hong Kong Academy for Performing Arts

2005-06

During 2005-06, there were no changes in the number and ranking of the top three tiers' staff at the HKAPA. The senior executive posts comprised that of the Director, the two Associate Directors, the five Deans, the Associate Dean and the Bursar. The pay package of the Director (Tier 1 staff equivalent to D4 rank) and the average total remuneration of the Tier 2 staff (equivalent to D1 rank) were no better than the comparable Government packages. The average staff cost of the Tier 3 staff (equivalent to the CEO rank) was slightly higher than the comparable Government package. The excess was mainly attributable to a general reduction in staff on-cost in the civil service salary calculations due to the adoption of changes in methodology and assumption/factors. With the implementation of the Non-accountable Cash Allowance (NCA) Scheme* on 1 September 2004, the Academy has reduced its staff on-cost by substituting the provision of quarters or Private Tenancy Allowance (PTA) to eligible staff with the offer of NCA. The non-compliance in respect of the Tier 3 has since been rectified as from November 2005 when all Tier 3 staff had joined the NCA Scheme.

2007-08

During the subject period, the total number of top three tier posts increased from 10 to 11. One additional Tier 3 post i.e. Director (Administration & Academic Links) was created by upgrading an existing post of Head of Administration and Personnel (equivalent to the Senior Executive Officer rank in the civil service) to take up new areas of responsibilities. The number and ranking of staff at the top three tiers are considered appropriate.

The annual average staff costs for the Tier 3 staff and Tier 2 staff serving the first contract during this period were lower than the comparable civil service benchmarks. The annual staff costs for the Tier 1 staff and the Tier 2 staff serving the second or further contract were slightly higher than the comparable Government packages. The excess pay for the Tier 1 staff was due to the payment of a higher housing allowance for the staff concerned. The reason for the excess was because at the time the contract with the concerned Tier 1 staff was negotiated, the staff was given a broad indication of the major terms of his remuneration including the provision of domestic accommodation at an indicative sum subject to the deduction of a certain prevailing percentage from the basic salary of the staff as rental contribution to the HKAPA. While the concerned staff was given the understanding that the imminent introduction of the Non-accountable Cash Allowance at the HKAPA would see a lower rate of housing benefit for him, the subject staff was disappointed at the significant reduction in the housing subsidy available when the formal contract was executed. The HKAPA Council considered possible ways to remedy the situation and came up with the proposal of topping up the difference from non-subvention money. The HKAPA has been since topping up the excess by income from venue hiring. The slight excess for the Tier 2 staff serving the second or further contracts was due to the increase in average basic salary of the staff concerned with more of them reaching the maximum point of their pay scale. Given the special timing circumstances of the case of the concerned Tier 1 staff and that the Academy has been funding the Tier 1 staff's extra housing allowances with non-subvention money while the excess in average pay package of the Tier 2 staff (serving second or further contracts) was attributable to salary increment based on service period, no rectification measures were considered necessary from the HKAPA.

Further Disclosure on the Remuneration Package of the Tier 1 Staff at the HKADC and the HKAPA

The total annual remuneration packages for the Tier 1 staff of the HKADC and the HKAPA in 2005-06 and 2007-08 respectively are set out in the table below:

Organisation	Tier 1 Post	Total Annual Pay Package (Rounded to the nearest '000)
		2005 - 06	2007 - 08
Hong Kong Arts Development Council	Chief Executive	$1,888,000	$1,606,000
Hong Kong Academy for Performing Arts	Director	$2,462,000	$2,630,000

* Non-accountable Cash Allowance (NCA) Scheme is a housing benefit scheme for the HKAPA staff on a salary point equivalent to MPS Point 34 or above in the civil service. Under the Scheme, eligible staff receive a monthly non-accountable allowance for a maximum aggregate period of 120 months during their service with the Academy. The amount of allowance for individual staff is linked to the substantive salary point of the staff concerned and the scale of allowance is the same as that under the civil service NCA Scheme.