The MaD Team was notified that our grant from the CreateSmart Initiative (CSI) for the MaD Forum 2013 was selected for the Government’s Audit Commission’s review in November 2013. Over the past few months, we have tried our best to facilitate the review process, and all documents and proofs required by the Audit Commission and CreateHK were submitted punctually.
We were deeply shocked by the inaccurate coverage on partial content from the Director of Audit’s report. The distorted content is ungrounded and does not account for the truth.
The MaD Forum 2013 has been completed for more than 1 year, and CreateHK has accepted our independent audit report. No government department, including the Audit Commission, has ever queried us for misappropriation of funds.
We hereby state:
1. The MaD Forum 2013 received a grant of about 3.6M from CSI. The amount was spent exclusively on the project. We have adhered to CSI funding guidelines and have submitted valid financial reports, covering also funds from other sponsors, to CreateHK. All income and expenditures are listed under clear categories in an independent audit report already accepted by CSI.
2. The independent auditor we engaged has issued two written confirmations to CreateHK, proving that the Hong Kong Institute of Contemporary Culture has set up a designated account for the MaD Forum 2013. The account has recorded all project income and expenditures.
Funding from CSI comes in instalments. After the initial 70%, the remaining 30% of the grant is given only after CreateHK’s acceptance of the project completion report. There is usually a time lag of nine months to one year. As a small NGO without regular funding, we maintain our cash flow by settling payments with consolidated resources, whose accounting is nonetheless clearly differentiated. The legitimacy of our financial operations is endorsed by professional accountants. At the onset of the audit process, we have proactively informed CreateHK and the Audit Commission of our financial treatments. The claim of misappropriation of funds is an unacceptably false interpretation.
3. As a continual platform, MaD runs round-the-year programmes, with the MaD Forum as its anchor. In the past five years since the founding of MaD in 2010, we have been a champion of tri-sector collaboration, fostering synergy among the Government, businesses and the civil sector. The grant from CSI makes up 50% of the Forum’s budget. The rest of our operations relies on sponsorships from corporations and foundations. As listed in our independent audit report, our unspent fund balances came from other sponsors instead of CSI. That our treatment of these balancesfor operating expenditure throughout the yearhas been previously accepted by CreateHK is also stated in the Director of Audit’s report.
We welcome the Audit Commission’s suggestions and are willing to report the use of our financesto CreateHK in an even more transparent manner. We however hope that the principle of flexibility is appreciated so that there is room for MaD to grow on a sustainable basis.
As a flagship creative event initiated by the civil society, MaD has been striving to create impact for Hong Kong as a creative city. We very much cherish the support from the Government and all our allies, and are extremely vigilant in our use of resources.
We trust that this incident would not affect our mission and integrity. At this moment, we would like to thank our cross-sector supporters for their never-failing trust and support. We will continue to endeavour for our shared cause and make a difference for Hong Kong.
The MaD Team
Hong Kong Institute of Contemporary Culture Limited
17 April 2014