SUBVENTIONS Lump Sum Grant Subventions 15.1 The Lump Sum Grant Subvention System (LSGSS), which aims to improve the delivery of welfare services through greater flexibility in resources deployment, has been implemented since 1 January 2001. As at 31 March 2011, 164 NGOs are funded under LSGSS, accounting for about 99% of the total subventions. The Social Welfare Department (SWD) provides a one-stop service with advice, guidance and support to non-governmental organisations (NGOs) in issues relating to performance monitoring and subventions matters.     15.2 In early 2008, the Government appointed the Lump Sum Grant Independent Review Committee (IRC) to assess the overall effectiveness of the LSGSS. Having analysed the views collected, the IRC considered that the principles of the LSGSS are sound and the system is worth retaining. The Government accepted all the 36 recommendations made by the IRC for improving the LSGSS and has implemented or taken forward all the recommendations.     15.3 The Lump Sum Grant Independent Complaints Handling Committee handles Lump Sum Grant related complaints that cannot be dealt with satisfactorily by NGOs.   Service Performance Monitoring System 15.4 The Service Performance Monitoring System (SPMS) of SWD aims to:       (a) encourage service operators to take greater accountability for the performance of their service units under corporate governance     (b) enable early detection and intervention of problem performance under risk management     (c) achieve cost-effectiveness in service performance monitoring for the provision of high quality welfare services     15.5 The SPMS includes:       (a) submission of self-assessment reports on Essential Service Requirements, Service Quality Standards, Output Standards and Outcome Standards by service operators     (b) submission of variance reports on the performance of Output Standards and Outcome Standards by service operators     (c) conducting review/surprise visits and on-site assessment for selected service units to assess their implementation of the above by SWD Best Practice Manual 15.6 The IRC recommended in its Review Report in December 2008 that a Best Practice Manual (BPM) for NGOs on various management issues such as human resource policies, the level of reserves and their gainful deployment, corporate governance and accountability, etc., should be developed by the welfare sector, with professional input from management experts if necessary; and the Lump Sum Grant Steering Committee (LSGSC) should work with the sector in drawing up this manual. In late 2010, SWD commissioned a consultancy study for the production of the BPM. Upon completion of the field study, the consultant will consult the sector and draft the report for the LSGSC’s consideration. If all goes well, the consultancy study is expected to be completed by late 2012.   Social Welfare Development Fund 15.7 The IRC also recommended in its Review Report to set up a $1 billion Social Welfare Development Fund (SWDF) to support 171 subvented NGOs in carrying out training and professional development programmes, business system upgrading projects and service delivery enhancement studies. With the support of the Lotteries Fund Advisory Committee, SWD launched the SWDF in January 2010 for implementation by three three-year phases for nine years in total from 2010-11 to 2018-19. As at 31 March 2011, about $242 million was approved for 136 NGOs to operate IT-related and non-IT-related projects.   Charitable Fund-raising 15.8 Under Section 88 of the Inland Revenue Ordinance, Cap. 112, the Inland Revenue Department grants tax exemption to charitable institutions or trusts of a public character. The Director of Social Welfare issues Permits under Section 4(17)(i) of the Summary Offences Ordinance, Cap. 228, for any collection of money or sale or exchange for donation of badges, tokens or similar articles for charitable purposes in public places while the Secretary for Home Affairs issues Permits for fund-raising activities of other purposes under Section 4(17)(ii) of the same Ordinance, and the Commissioner for Television and Entertainment Licensing issues licences under the Gambling Ordinance, Cap.148, for the conduct and sale of lotteries. In 2009-10 and 2010-11, a total of 1 478 Permits were issued by the Director of Social Welfare, including Permits for flag days.     15.9 To improve the transparency and accountability of charitable fund-raising activities, SWD has promulgated the “Reference Guide on Best Practices for Charitable Fund-raising Activities” (the Guide), which covers best practices in the areas on Donors’ Right, Fund-raising Practices and Financial Accountability. Charities are encouraged to adopt these best practices voluntarily for their fund-raising activities. The public is also encouraged to use the Guide as a reference against which the performance of a charity in fund-raising can be measured.