The Commission of Audit (CA) conducted a special audit on the resources applied and the works carried out by the Preparatory Committee for the Participation of Macau in the Shanghai World Expo 2010 (Preparatory Committee) in order to verify whether it had set up proper plans and implemented adequate measures for accomplishing the objectives which lead to its own foundation.
1.1 Audit findings and opinion
1.1.1 Estimating the total expenses
1.1.1.1 Scientific estimation
In October 2008 the Preparatory Committee submitted to the Secretary for Economy and Finance (to whom the Preparatory Committee is accountable) the “initial global budget for Macau Government’s participation in the Shanghai World Expo” (hereinafter referred to as initial budget). It is the only document in which the Preparatory Committee laid out the estimation of funds needed for the participation. However the estimate has been calculated unscientifically. According to the methodology presented in that document, the Preparatory Committee calculated one of the key values of the initial budget, which totaled 320 million patacas, by summing up all expenses in goods and services the Macau Government had in 1998 when it took part in the Lisbon World Expo, and then determined the percentage of this sum in the Government’s budget for the same year, in the part of goods and services. The percentage was then applied onto the part of goods and services of the Government’s budget for 2007, obtaining this way that key value. Since the factors considered for the Lisbon World Expo had no direct relation with the resources needed for the participation in the Shanghai World Expo, any estimation without considering the real expenses in Shanghai cannot be scientific.
By the time the budget was being working out, the Preparatory Committee already knew, although not to the detail, that Macau would be building two exhibition halls whose size was already set and that a Macau Week and other similar activities would be staged. On this knowledge, the Preparatory Committee could have been able to work out a preliminary global budget, which should be made more detailed and precise as the requirements and necessities are becoming clearer, and gradually finalizing the budget.
1.1.1.2 Global estimation
To have a complete overview on the financial resources needed for a multi-year project, it’s necessary to estimate all the involved expenses and from the very beginning of the project up to its conclusion, i.e. a total estimate of the project should be made. It’s true that the Preparatory Committee included in the initial budget the expenses to be incurred from the start to the end of the participation, covering the building of the two halls, the exhibits, the performing activities and the current expenses in Shanghai; however, the Preparatory Committee didn’t include the expenses for its own installation and current operations. On the other hand, the expenses incorporated into the Macao Economic Services budget1 , because of its yearly nature, also don’t reflect all the expenses incurred by the Preparatory Committee, from the beginning to the end of the project.
1.1.2 “Liquidation”
On its last working day, 17.03.2011, the Preparatory Committee presented a document — “General Report on the Macau Participation in the World Expo 2010 in Shanghai” — in which it reported on the expenses incurred with the two exhibition halls in Shanghai up to December 2010, but, again, excluding the expenses with its own installation and operations. Since the report didn’t include the expenses related to the Preparatory Committee and some other expenses of the project weren’t either accounted for, one must conclude that what the Preparatory Committee presented was no definitive and final balance of Macau’s participation in the Shanghai World Expo. On the other hand, the Preparatory Committee had around four and a half month time, from the end of the Expo to the day of its dissolution, to finalize the liquidation works which solely depended on itself. Nevertheless, the Preparatory Committee failed to accomplish these works which fell within its remit.
1.1.3 Registration of movable assets
The Preparatory Committee didn’t comply with the Administrative Regulation Nr. 31/2008 (Register of movable assets belonging to the Special Administrative Region of Macau) because it didn’t record the movable assets placed in the Macau Pavilion both by their acquisition and residual price in the movable assets inventory. The Preparatory Committee also wasn’t able to explain the discrepancy between the value of the bought goods and the value of goods registered in the inventory. Since there were no documents and other instruments legitimate enough to corroborate the facts, it was not possible to ascertain whether all the acquired goods were recorded in the inventory.
1.2 Suggestions presented by the Commission of Audit
1.2.1. According to the needs of Macau, to the requirements, scale and contents of the activities and taking into account the required resources, the organizing entity should as early as possible prepare the respective budget, for which scientific methods should be applied in estimating all expenses, set a budgetary ceiling for the whole project and arrange the financial programme for the years covered by the project. The organizing entity should also revise, adjust and make the budget more precise as more detailed and exact information are made available and, at the same time, the number of unknown factors gets reduced.
1.2.2. The “liquidation” works to be concluded before the dissolution of the organizing entity should include a final balance of the income and expenses in order to give a complete picture of the financial position of the project and to provide the competent entity with concrete data so that he could assess the achieved results. The organizing entity should ensure time and manpower to conclude the “liquidation” works which it alone can carry out before its own dissolution. Exceptions can be made to works when effective conditions do impede the organizing entity to carry them out.
1.2.3. To ensure the normal management of movable assets, all these assets should be registered according to the terms of the Administrative Regulation Nr. 31/2001, namely by registering both their acquisition and residual values in the inventory of the corresponding year. The public department concerned should implement measures able to keep the movable assets inventory always updated, namely in regard to type, quantity and value. It should also be ensured that financial data are attached to the entries in order to make them complete, in compliance with the aforesaid administrative regulation.
1. The Nr. 10 of the Chief Executive Dispatch n.o 63/208 (Set up of the Preparatory Committee for the Participation of Macau in the Shanghai World Expo 2010) lays down that: “All expenses arisen from the foundation and working of the Committee are incorporated into the Macao Economic Services budget.”
