"Save & Invest Account" was put in place via Finance Bureau Circular Memorandum (FBCM) 12/99 issued in July 1999. We have processed a few withdrawals by bureaux and departments since then. Using these as examples below, we illustrate how this facility works.

"Save & Invest Account"

Just to recap, in order to encourage bureaux and departments to economise, a specific amount of a bureau's or department's unspent cash-limited Departmental Expenses (DE) in a year is credited to the bureau's/department's "Save & Invest Account" for implementing new initiatives to enhance productivity in the future. The balance will accrue annually for withdrawal at any time of the year to be spent on enhanced productivity projects or items. Provided that the spending is of a one-off nature and will bring about productivity or efficiency improvements for the bureaux and departments, the rules for withdrawal are very simple and straightforward. After all, bureaux and departments are using funds they manage to save in the first instance.

"Save & Invest Account" in Action

Case No. 1

In October 1999, one bureau withdrew a sum of $477,000 in the form of supplementary provision under Subhead 149 in 1999-2000 under the "Save & Invest Account" for replacing some computer system units and monitors purchased in 1994-95 for running a management information system. The new computer units and monitors were classified as administrative computers costing less than $100,000 each and hence should be charged to Subhead 149 General Departmental Expenses. The total replacement cost was $477,000.

The replacement was justified on the ground of an expected increase in the frequency of failure of those machines and a lower maintenance cost after replacement. Regarding the latter, the bureau noted that the annual maintenance cost of the existing system was high as it was subject to an old contract which reflected the high market price prevailing at the time, while the current Government bulk contract supplying similar equipment provides maintenance at a much lower cost. Accordingly, after replacement of the existing equipment, expenditure on the annual maintenance of the new equipment is significantly lower than that of the old equipment and will provide an annual savings on recurrent maintenance of $152,000.

Case No. 2

In December 1999, one bureau withdrew a sum of $153,400 for purchasing 52 sets of Laser printer to replace 39 existing inkjet printers and to equip 13 additional officers on the network with their own printing facility. This improvement in provision of office equipment enhances work efficiency and confidentiality. Furthermore, the toner cost and maintenance cost of Laser printers are much lower than those of inkjet printers.

Case No. 3

In January 2000, one department withdrew a sum of $860,000 for purchasing one set of pile driving analyser and one propriety laser-cutting machine. At present, the department engages specialist firms to perform tests on bearing capacity of piles.

Purchase of a pile driving analyser will enable the department to undertake some of these tests in-house, thus saving on spending on hire of service.

Propriety laser-cutting machine is used for preparation of models for assessing different building design options. At present, such work is done by external consultants. Purchase of the machine will enable the work to be done in-house. Since these two purchases are minor plant and equipment, the withdrawal necessitated supplementary provision of $560,000 to the department's Subhead 661 Minor plant, vehicles and equipment (block vote) in 1999-2000.

The Editor wishes to remind Controlling Officers that balances credited into their "Save & Invest Account" are only valid for three years from the date of credit. In other words, balances credited from the unspent funds in 1998-99 would lapse if not withdrawn in or before 2001-02. Also there is no need to wait for circulars to invite applications. Controlling Officers are free to apply via Memo any time of the year.