Always serving the public

04/30/2021

As Director of Audit at the Audit Commission, John Chu helps the government improve the performance and accountability of public sector organizations, while ensuring Hong Kong taxpayers get value for money. He tells Nicky Burridge about the landmark changes and challenges he has experienced over the last three decades at the commission, the increasing importance of accountability, and the most rewarding aspects that come with a career in the public sector

Photography by Calvin Sit



Better strategies need to be formulated to reduce diesel commercial vehicles running on the roads, which is the main cause of roadside pollution. More also needs to be done to increase the provision of boarding places in special schools for children with special educational needs. At first glance, these two issues may not have much in common, but they are both recommendations put forward in reports compiled by the Audit Commission, demonstrating its broad scope.

John Chu, Director of Audit at the Audit Commission, explains that the commission’s mission is to provide independent audit services to help the government and other public sector bodies enhance their performance and accountability. “Our audit reviews aim to identify areas for improvement and help them learn lessons. We make workable and constructive suggestions for improvements. We are not trying to criticize or find fault with officials. We are forward-looking and try to add value to government operations,” says Chu, a member of the Hong Kong Institute of CPAs. He says all of the observations and recommendations made in the commission’s reports have been accepted by the government.

He gives the example of two lengthy reports on food safety that were issued by the commission in 2018 and contained nearly 100 recommendations for improving the import control of food by air, road and sea. “Even though we were critical of the controls of the import of food, the government department concerned was very positive towards our recommendations,” he says. 

However, Chu says that difficulties can arise when there is no single government bureau or department that is responsible for a problem identified in an audit report. He explains that in 2013, the commission produced a report on the management of roadside skips, or open-top containers, in view of an increase in public complaints about them. 

​The commission identified nearly 500 skips that were not fully compliant with the guidelines issued by the government, such as unlawfully occupying public roads and obstructing traffic, or posing environmental or hygiene risks. “Because no single government bureau or department has been designated primary responsibility to regulate and facilitate the operation of roadside skips, it is difficult to make significant improvements, despite our recommendations. Currently the Public Accounts Committee of the Legislative Council is still following up on the issues more than seven years later,” he says.


“The Audit Commission cannot always meet increasing public expectations, so we are under great pressure generated by the expectation gap.”


As Director of Audit at the Audit Commission, John Chu is in charge of reviewing audit reports to ensure they meet the right standards while also ensuring steering the commission towards both short erm and long term goals.


Ensuring high-quality audits

Chu explains that if the Audit Commission is likened to an audit firm, then his role as Director of Audit is like that of a managing partner. “My deputy and assistant directors are my key partners, and my work is to manage them and steer the Audit Commission towards achieving its strategic goals.” He also likens himself to being the conductor of a symphony orchestra, ensuring everyone is working in harmony to achieve the commission’s aims.

On a day-to-day basis, much of Chu’s work involves reviewing audit reports to ensure they meet the high standards the commission requires. He submits three Director of Audit’s Reports to the Legislative Council each year. Two of these reports cover the results of value for money audits, which look at the economy, efficiency and effectiveness with which different public sector bodies conduct their work. The third report covers regularity audits, which look at the government’s financial and accounting transactions and ensure that they comply with Generally Accepted Accounting Principles. “Each year the commission certifies more than 80 fund accounts and issues around 18 value for money audit reports. “Each of these value for money audits is a project in itself, with each one lasting for at least half a year and sometimes longer for the more complex ones. I have a key role to play in the overall governance of the project management,” he says. This involves overseeing the progress and development of the project, reviewing the draft audit reports, holding discussion sessions at different stages during the project, and including the audit report as a chapter in his own Director of Audit’s Report.

He says the public has very high expectations of how the commission should help the government address all of the major problems facing Hong Kong, including deep-rooted issues, such as the shortage of public housing, but points out that some of these issues are outside the scope of its work. “The Audit Commission cannot always meet increasing public expectations, so we are under great pressure generated by the expectation gap.” Chu says one way to address this expectation gap is to explain very clearly what the commission’s role is and the limitations of its work. “For example, according to the value for money audit guidelines, agreed between the Public Accounts Committee and the Audit Commission and accepted by the government, we are not entitled to question the merit of the policy objectives, but our audits can question the economy, efficiency and effectiveness of the means used to achieve the policy objectives,” he explains, adding that the commission also avoids unnecessarily politicizing the issues raised in its reports, but instead has a rational discussion of the issues with the aim of making constructive observations and recommendations for improvements.

He gives the example of an audit report on the allocation and utilization of public rental housing (PRH) flats issued by the commission in October 2013. He points out that the shortage and long waiting times for PRH have long been matters of great public concern, while the implementation of the Quota and Points System (QPS) for non-elderly one-person applicants, the management of unoccupied flats and under-occupied households, as well as the implementation of the Well-off Tenants Policies, are all controversial and sensitive issues. The provision of public housing is also an essential social service that benefits the general public, especially disadvantaged groups. 

He says: “It is therefore imperative that PRH flats are allocated to people most in need of housing assistance. While the commission was not entitled to question the merit of the policy initiatives, it was duty-bound to give comments from the point of view of their effect on the public purse. For instance, noting that there were a large number of young and better educated QPS applicants on the PRH waiting list, the audit report did mention that there was a built-in incentive in the QPS which encouraged applicants to apply for PRH as early as possible, although they might not really have a pressing need for housing and, unless such incentive was removed, QPS applications would continue to increase and the PRH waiting time would likely become longer and longer.” The commission recommended that a comprehensive review of QPS should be conducted, including assessing its effectiveness and sustainability in achieving its objectives. But Chu adds: “Given that the shortage of public housing is such a deep-rooted problem involving complex policy ramifications, it is hard to expect that the problem can be fully resolved just by conducting an audit review.” 

A life in the public sector

Chu has worked for the government throughout his career. He joined the Treasury in 1984 as an accounting officer shortly after graduating from the University of Hong Kong with a degree in social sciences, in which he majored in management studies and minored in sociology. “Looking back, the sociological perspectives I gained at university have stood me in good stead. The critical skills, sometimes called ‘debunking perspectives’ in sociology, have proved to be very relevant and useful in conducting value for money audits in the public sector,” he says.

He spent four years at the Treasury, initially working as an accounting manager for the then Medical and Health Department, before moving on to a post responsible for developing accounting and financial information systems for the government, and later working in the area of fund investment management. It was during this period that he qualified as a CPA. He joined the Audit Commission in 1988 as an auditor. “I have worked in the Audit Commission for more than 30 years, rising through the ranks to my current position of the head of the commission as Director of Audit,” he says. He also undertook non-audit work when he was head of the Technical Administration Branch, which is responsible for the corporate services and technical support work of the commission. This included the production of the Director of Audit’s Report and overseeing matters relating to the Public Accounts Committee proceedings, as well as carrying out strategic planning, quality assurance work and staff training and management.

Chu says the management experience he gained in this post has been extremely useful to him in his current role. He is also grateful for the mentorship he has received from the three previous Directors of Audit. “It has been a great privilege for me to consolidate my past experience working with them and continue to build on the solid foundation they have established over the years,” he says.​



Chu has spent over 30 years in government services. He joined the Treasury in 1984 as an accounting officer after graduating from the University of Hong Kong. He then joined the Audit Commission in 1988 as an auditor.


Constant change

Unsurprisingly, Chu has seen significant changes during his 30 years at the Audit Commission. “The only thing constant is change,” he says. He thinks the biggest change has been the increase in expectations. “There are now generally much higher expectations of the government and other public sector organizations and their accountability. There is also a greater interest in our audit reports.” He points out that when he first started working at the commission, the value for money audit reports were only a few pages long, and each subject in the Director of Audit’s Report comprised just a few paragraphs. “Today, while many of the reports are more than 100 pages long, some people still think we have not done enough.”

Another significant change is the advancement of technology, with big data analytics and artificial intelligence (AI) playing an increasingly important role in audit work. The commission has a strong commitment to innovation and is exploring the development of a cloud computing-enabled IT system that would use big data analytics to collate the data collected over the years to be harnessed for pre-audit research and planning work. “In a later stage, we will see if technologies, including AI, can help us strengthen our data mining techniques to identify areas for concern, so that we can focus our attention on those areas. We continue to keep abreast of developments in this technology and make investments in this area,” Chu says.

He says there has been an increasing use of data mining techniques in analysing information obtained in the course of audit reviews in recent years. “Such techniques help the commission perform in-depth analyses and develop useful observations and recommendations.” He explains that in the April 2019 audit review on the planning, provision and management of public parking spaces, the commission obtained computer records of on-street parking spaces from the Transport Department. “By using data mining techniques, parameters, such as locations, parking fees and operating periods, utilization records of metered parking spaces in the territory were linked up for analysis. By data matching, the commission identified some metered parking spaces with high utilization but charging the low rate of HK$2 per 30 minutes. Some metered parking spaces at the same location (i.e. with the same parking demand) but with different operating periods were also identified.” He says the anomalies identified were highlighted in the audit report for rectification by the government.

The COVID-19 pandemic has also had a significant impact on the work of the commission. Chu explains that work-from-home arrangements have meant it has taken longer to get information from the organizations being audited, while staff have been unable to conduct physical inspections for some audits, which has made it more difficult to carry out the necessary audit procedures. As such, the commission has had to make it possible for staff to access the government network from home, as well as using video conferencing for internal meetings and consultations with clients, while training is also carried out virtually. At the same time, the government’s allocation of hundreds of billions of dollars through the 2020-21 Budget and the four rounds of injections into the Anti-epidemic Fund to provide various relief measures to the public has significantly increased the commission’s workload. “We are now coming to grips with the first-year audit of the fund. Our workload has inevitably increased significantly, and we are redeploying our internal resources across our different programme areas to cope,” he says.


“I gain a great deal of job satisfaction from knowing that any extra effort I put into my work will eventually benefit the community as a whole. It keeps me motivated to spare no effort.”

The need for accountability

Chu believes it is particularly important that the government and public sector bodies perform well because they are not only entrusted with substantial public resources, including taxpayers’ money, but they are also providing essential public services, such as education, public housing and health services, as well as promoting the economy and overseeing environmental protection. “The quality and effectiveness of public services directly affect the livelihood of the general public and the sustainable development of Hong Kong, so it is most important that government and public sector bodies perform well in the delivery of services and are held accountable for the use of resources,” he says. 

He welcomes the recent inclusion of a public sector category in the Institute’s Best Corporate Governance Awards. “It is important to promote good corporate governance and accountability in the public sector and I think the awards are a great initiative to recognize the commitment of public sector organizations to enhancing their corporate governance.” It was knowing that his work would benefit the community that first attracted Chu to working in the public sector when he graduated. “I gain a great deal of job satisfaction from knowing that any extra effort I put into my work will eventually benefit the community as a whole. It keeps me motivated to spare no effort.”


For any young Institute members considering a career in the public sector, Chu points out that the monetary rewards and fringe benefits are likely to be less attractive compared with top jobs in the private sector, while there are also a lot of government rules and regulations they will need to comply with. “But,” he adds, “the job satisfaction gained from working in the public sector and serving the community is really matchless.” 


The Audit Commission, founded in 1910, is one of the oldest government departments of the Government of Hong Kong. It was known as the Audit Department before 1 July 1997. Its main functions are to provide independent, professional and quality audit services to the Legislative Council and public sector organizations in order to help the government enhance public sector performance and accountability in Hong Kong.