A study on the establishment of the Resource Management Unit under the financial management reform

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A study on the establishment of the Resource Management Unit under the financial management reform

 

Author: Lai, Shuk-han Sandy
Title: A study on the establishment of the Resource Management Unit under the financial management reform
Degree: M.Sc.
Year: 2001
Subject: Finance, Public -- China -- Hong Kong
Public administration -- China -- Hong Kong
Hong Kong Polytechnic University -- Dissertations
Department: Multi-disciplinary Studies
Dept. of Management
Pages: ix, 100 leaves : ill. ; 30 cm
Language: English
InnoPac Record: http://library.polyu.edu.hk/record=b1569016
URI: http://theses.lib.polyu.edu.hk/handle/200/2598
Abstract: Hong Kong is a unique territory. The Hong Kong Special Administrative Region (HKSAR) Government has not only enjoyed good reputation of an efficient and effective administration, but also maintained a healthy financial condition. While most governments are involved with large debts, the HKSAR Government keeps a great deal of fiscal reserves in the past years, except that starting in late 1997 when there is financial turmoil. As a result, public budgeting is an essential activity of all governments because the implementation of policy must depend on the availability of resources. Public budgeting determines who gets what, when and how and reflects the priorities and values of a government. Therefore, it is vital to study the HKSAR Government budget in order to know how resources are allocated and the theory behind. Traditionally, the resource management role of HKSAR Government activities was performed by Finance Bureau (FB) who centralised the resource allocation and advisory role to policy bureau and departments. Arising from the Public Sector Reform in the early 1980, the Hong Kong Government (now known as HKSAR Government since July 1997) considered that there definitely existed scope for the financial management reform. Various initiatives concerning financial management reform were then launched in the past decades, e.g. the establishment of trading fund departments, privatisation exercise in the government services etc. Of these, the most fundamental change was the introduction of the newly Formed Resource Management Unit (RMU) in each policy bureau in 1994. The ultimate aim was to set up RMUs in the policy bureaux to support senior management for resource allocation. By doing so, it improved the way in which public Finances were managed. Therefore, the purpose of this research is to find our the rationale behind the setting up of the RMU and review whether the unit has performed its original role, and if not, the reasons for the inefthctive implementation of it so that possible improvements areas can be rendered. Theory of' New Public Management decision-making model, policy implementation model will also be examined during the research. Based on the findings of this research, it can be seen that the launching of the RMU is initiated from top-down and is arising from the area of financial management reform in Public Sector Reform which has the characteristics of the New Public Management like driving the responsibility for decision-making downwards. i.e. delegation of financial power from FB to policy bureau and Head of department. The decision-making process in deriving Government budget has not changed much with the setting up the RMU. It still relies heavily on the incremental decision-making approach as senior bureaucrat is rather conservative and Hong Kong is still dominant by the executive-led government after 1997. The study can be concluded that the original goal to set up the RMU is good, as it endeavors to help policy bureau resolve resource matter when considering new initiative or proposals. Nevertheless, there arc certain improvement areas in policy bureaux in managing relationships with the legislature, ensuring the financial implications of policy proposals are taken fully into account, obtaining and allocating resotirces as well as monitoring and evaluating performance of departments under their purview with the setting up of the RMU. However, the implementation of this top-down policy implementation (establishment of the RMU) still requires further refinement and refocusing of the role of both RMU and FB, and makes full use of the function of the RMU; otherwise RMU will only remain as a mail-messenger, but not rendering proper resource-management advice to policy bureau and department.

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