Audit exposes costly trips of HKUST research institute

Henry Siu

A Hong Kong University of Science and Technology research institute spent HK$2 million solely on plane tickets for 20 business trips - with a former chief executive officer involved in multiple changes in itinerary and extended stays - according to the latest Audit Report.

The university's Nano and Advanced Materials Institute was also named and shamed for the absence of clauses to safeguard national security in its subsidy agreement between the government and HKUST.

Subsidized with a one-off HK$1.5 billion funding from the government when it was incorporated in 2006, NAMI is a subsidiary of HKUST designated by the government's Innovation and Technology Commission as a research and development center for nanotechnology and advanced materials.

Director of Audit Nelson Lam Chi-yuen said in the Audit Commission's latest report that there is room for improvement within the institute's administrative expenditure, corporate governance and approval of entertainment expenses.

After reviewing the 20 business trips NAMI staff have taken since 2019, the commission determined that plane tickets alone cost the institute a total of HK$2 million, and that nine out of the 20 business trips - or 45 percent - had staff changing itineraries, citing personal reasons.

"For the nine business travels, the same staff extended stay for personal reasons," the Audit Report revealed.

Three of the nine trips with itinerary changes and extended stays generated excess traveling costs ranging from HK$2,300 to HK$11,430, the report added.

Although the trips prompted excess cost, the commission found that approval was never sought for the modification of the business travel arrangements.

At the same time, NAMI did not have specific guidelines on modification of business travel arrangements.

"The approving authorities for subsistence allowance claims involving the chief executive officer were not specified in NAMI's guidelines. The subsistence allowance claims involving the chief executive officer were approved by the chief technology officer," the report said.

"Furthermore, for subsistence allowance claims involving the chief executive officer for extra meal costs or accommodation costs in addition to the entitled subsistence allowance, only exceptional approval from the chief executive officer or his designate is required."

It found subsistence allowance claims for 30 business trips totaling HK$1 million, in which four business trips all involving the then CEO - who was not named in the report - involved meal costs exceeding the entitled subsistence allowance, ranging from HK$607 to HK$4,700.

According to the report, seven of 10 business trips involved the then CEO claiming hotel accommodations exceeding the entitled subsistence allowance, ranging from HK$5,292 to HK$82,644.

"Two claims involved meal costs exceeding the cost-per-head spending limits by HK$39 and HK$50 respectively," the report said.

"For one claim, the guests entertained were significantly outnumbered by NAMI staff. There were eight staff and two guests. However, no justifications were provided in the claim form to justify that staff significantly outnumbered the guests entertained in the event."

The report also said NAMI needs to strengthen guidance and regulation over matters concerning the safeguarding of national security.

Commissioner for Innovation and Technology Ivan Lee Kwok-bun and current NAMI CEO Andy Fung expressed agreement with the report's suggestions.

henry.siu@singtaonewscorp.com