Chapter 3 - Governing Functions

The University has a sound system for proper and effective management of its financial resources, and to ensure 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, taking into account the approved government subventions and planned activities including capital projects to support the strategic focus and operating requirements of the University. The University budget is based on a three-year roll-over planning cycle, which shall be approved by the Council with the endorsement of Finance Committee and Executive Committee. A half-yearly review of the current year budget will be conducted to ensure that both income and expenditure are in line with the approved budget, with timely deployment of potential saving in resources.

The Finance Committee of 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 Council reviews the annual audited financial statements and the key audit findings with the external auditor before submission to Council for approval. The Committee advises and reports directly to the Council to ensure effective implementation of appropriate controls to address identified risks.

Investment

The University acts in accordance with the investment strategies formulated by the Investment Committee, based on the University Council’s approved Statement of Investment Policies and Guidelines (SIPG) which are reviewed regularly.

Following the SIPG, the University investment is managed through cash flow projection, diversified asset allocation, and rules governing the selection of investment counterparties with reference to their performance, credit rating and financial strength. The Investment Committee also conducts regular review on the performance of each investment manager.

Procurement

The University has in place a Purchasing Policy to ensure goods and services are obtained at the best value for money, and 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:

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