No. 24 of 2015 (general serial No. 221)
Audit Results of Budget Implementation and Other Fiscal Revenues and Expenditures of Central Departments for the Year 2014
(June 28, 2015)
Audit Results of Budget Implementation and Other Fiscal Revenues and Expenditures of the Ministry of Foreign Affairs for the Year 2014
Pursuant to the provisions of the Audit Law of the People’s Republic of China, the National Audit Office of China (hereinafter referred to as CNAO) conducted an audit from Jan. to March 2015 on the budget implementation and other fiscal revenues and expenditures of the Ministry of Foreign Affairs (hereinafter referred to as MFA) for the year 2014, with focus on MFA at its own level and 2 of its affiliated units: China Foreign Affairs University and Service Center for Foreign Ministry’s Overseas Offices, and carried out extended audit on other relevant matters.
I. Overview
MFA is a level-1 budget unit of the central treasury. The departmental budget is composed of the budget of MFA at its own level and the budgets of 273 level-2 units. The departmental fiscal appropriation budget expenditures of MFA approved by the Ministry of Finance for the year 2014 were 8,700.3069 million yuan.The MFA final accounts (draft) reflected 8,165.6435 million yuan of fiscal appropriation expenditures for that year. There were disparities of 534.6634 million yuan between the departmental budget and the implementation result. Regarding the specifics of the disparities and their causes, please refer to Annex 1.
The 2014fiscal appropriations of MFA at its own level and its affiliated units audited this time totaled 8,566.4226 million yuan, accounting for 98.46% of the total departmental fiscal appropriations. The audit found 76.5159 million yuan (of which 60.7164 million yuan in 2014) in the budget implementation and 6.9059 million yuan in other fiscal revenues and expenditures not in conformity with the regulations of financial systems. Regarding the impacts of the above-mentioned problems on MFA budget implementation result for the year 2014, please refer to Annex 2.
As the audit results show,the 2014 budget implementation of MFA at its own level and its affiliated units audited this time basically abided by the Budget Law and relevant laws and regulations, financial management and accounting process basically accorded with the Accounting Law and relevant regulations of financial and accounting systems. They constantly improved relevant systems and rectified problems found in the previous audit in real earnest.
II. Main problems found in the audit
A. Main problems in budget implementation
1. In 2014, MFA at its own level did not have budget preparations for government procurement of certain individual project, involving an amount of 2.015 million yuan.
2. In 2014, MFA at its own level and its affiliated Foreign Affairs University listed 7.5917 million yuan of expenditures not related with projects under the item of project expenditures.
3. In 2014, MFA at its own level, altering the usage of capital, used 2.0592 million yuan to subsidize its subordinate training center.
4. In 2013, its affiliated Foreign Affairs University misappropriated 15.0471 million yuan of project capital to be used for the construction of 3 other projects and subdivided the 3 projects into 8 individual projects and invited bids for the construction without collecting 752,400 yuan of margin money in violation of regulations. By the end of 2014, the above-mentioned projects had been completed and put into use.
5. In 2014, MFA at its own level listed 819,300 yuan for plane tickets beyond the prescribed scope under the item of expenses on hospitalities. Its affiliated Foreign Affairs University, in violation of regulations, failed to have bills of hospitalities attached to the certificates for reimbursement of domestic hospitalities. There were also problems of the number of guests exceeding the prescribed standards.
6. In 2014, MFA at its own level held 17 conferences beyond the plan, with 948,800 yuan of conference fees. The number of participants of 2 conferences exceeded the prescribed standards. It held at its affiliated training center 8 conferences which should be held in internal meeting rooms according to rules. It spent 239,800 yuan of conference fees for irregular accommodation. It bought conference equipments without government procurement, involving 4.7337 million yuan.
7. In 20124, in the invitation for bids for 10 projects, MFA at its own level failed to implement the procedures for bid-invitation, involving 29,05 million yuan. It bought 642,100 yuan of equipment without implementing the procedures for governmental procurement. Its affiliated Service Center decided the bid-winning unit in violation of regulations in the invitation for bids for the installation of elevators, involving a contracted amount of 3.5218 million yuan. The Administration Bureau of its affiliated Diaoyutai Guest House, without calling for open bids, directly signed a contract with a company for a betterment engineering project, involving 9.095 million yuan.
B. Main problems in other fiscal revenues and expenditures
1. Up to the end of 2014, MFA at its own level had failed to incorporate two estates into financial and physical accounts for accounting. 4 estates outside Beijing were not registered in physical account.
2. From 2013 to 2014, some institutes (departments) of its affiliated Foreign Affairs University deposited 6.9059 million yuan as off-the-book capital through such methods as using irregular bills to illegally obtain cash, concealing delayed incomes from tuition fees and donations. 5.6967 million yuan out of the above-mentioned amount were used to distribute subsidies and allowances. By the end of March 2015, there were 278,300 yuan of surplus.
In addition, its affiliated Foreign Affairs University had irregularitiesin the management of contracts, payment of capital and sites of capital construction.
III. Audit process and recommendations
With respect to the above-mentioned problems, CNAO produced an audit report according to law and issued an audit decision paper. Regarding certain individual project without preparation of government procurement budget, it has required strict implementation of relevant regulations and complete preparation of government procurement budget. Regarding self-adjustment of the use of budget capital without approval, it has required adjustment of relevant accounting recounts and the final accounts (draft). Regarding alteration of the use of project capital and subsidies to its affiliated training center, it has required retrieval of the capital and adjustment of the accounting records and the final accounts (draft). Regarding misappropriation of project capital, it has required retrieval of the misappropriated project capital and adjustment of the accounting records and the final accounts (draft). Regarding public hospitality beyond the set standards and irregular reimbursements, it has required strengthening the management of public hospitalities. Regarding problems existing in the management and use of conference fees, it has required strict implementation of relevant regulations for the management of conferences. Regarding some projects and engineering without implementation of government procurement, it has required strict implementation of regulations for government procurement. Regarding unreal accounts of fixed assets and confused registration, it has required timely clearance and registration of estates according to reality. Regarding its affiliated Foreign Affairs University depositing capital on off-the-book accounts, it has required clearance, retrieval of the capital and holding responsible persons accountable.
In respect of the problems found in the audit, CNAO recommends: MFA should further step up budget management, use capital in strict accordance with the prescribed scopes, enhance the efficiency of the use of capital, strictly implement relevant regulations for government procurement, earnestly implement the spirit of the CPC Central Committee’s eight-point decision on improving Party and government conduct, urge its affiliated units to abide by financial laws and regulations and improve the level of management.
IV. Rectification of the problems found in the audit
In respect of the problems found in the audit, MFA is organizing rectification. The specific rectification results will be made public by MFA.
Annexes: 1. Chart of Overall Situation of MFAFiscal Appropriation Budget Implementation for the Year 2014
2. Chart of Fiscal Appropriation Budget Implementation by focus-audited MFA units for the Year 2014
Audit Results of Budget Implementation and Other Fiscal Revenues and Expenditures of the National Development and Reform Commission
for the Year 2014
Pursuant to the provisions of the Audit Law of the People’s Republic of China, CNAO conducted an audit from Jan. to March 2015 on the budget implementation and other fiscal revenues and expenditures of the National Development and Reform Commission (hereinafter referred to as NDRC) for the year 2014, with focus on the Commission at its own level and 4 of its affiliated units: Appraisal Center for State Invested Projects (hereinafter Appraisal Center), the Academy of Macroeconomic Studies, City and Town Reform & Development Center (hereinafter Town Center) and the Training Center, and carried out extended audit on other relevant matters.
I. Overview
NDRC is a level-1 budget unit of the central treasury. The departmental budget is composed of the budget ofNDRC at its own level and the budgets of 19 level-2 units. The departmental fiscal appropriation budget expenditures of NDRC approved by the Ministry of Finance for the year 2014 were 1,237.2385 million yuan (including budget on governmental funds. same below.). The NDRC final accounts (draft) reflected 956.6645 million yuan of fiscal appropriation expenditures for that year. There were disparities of 280.574 million yuan between the departmental budget and the implementation result. Regarding the specifics of the disparities and their causes, please refer to Annex 1.
The 2014fiscal appropriations of NDRC at its own level and its affiliated units audited this time totaled 938.2231 million yuan, accounting for 75.83% of the total departmental fiscal appropriations. The audit found 3.993 million yuan (all in 2014) in the budget implementation and 147.915 million yuan in other fiscal revenues and expenditures not in conformity with the regulations of financial systems. Regarding the impacts of the above-mentioned problems on NDRC budget implementation result for the year 2014, please refer to Annex 2.
As the audit results show, the 2014 budget implementation of NDRC and its affiliated units audited this time basically abided by the Budget Law and other financial and economic laws and regulations, financial management and accounting process basically accorded with the Accounting Law and regulations of relevant accounting systems. They carried out active rectification of the problems found in the previous audit.
II. Main problems found in the audit
A. Main problems in budget implementation
1. In 2014, NDRC at its own level, under the circumstances that the project fund had not been completely spent, started to use 1 million standby fund as supplement, resulting in 1.3109 million yuan of year-end carryover.
2. In 2014, its Appraisal Center had 1.2407 million yuan of staffing expenses beyond the budget. The source was incomes from undertakings.
3. Problems in the management of “three public expenses”:
(1) In 2014, its affiliated Appraisal Center listed expenses on international travels and accommodation under the item of expenses on training, resulting in 107,300 yuan not reflected in the expenses on overseas travels.
(2) In 2014, its affiliated Academy of Macroeconomic Studies had such problems as incomplete reimbursement certificates for public hospitalities, involving 498,400 yuan.
4. In 2014, its affiliated Appraisal Center and Town Center respectively held 3 and 8 conferences at non-designated hotels, spending 33,000 yuan and 63,700 yuan.
5. In 2014, its affiliated Town Center, in violation of regulations, reimbursed first-class plane tickets for personnel below the departmental rank, involving 739,000 yuan.
B. Main problems in other fiscal revenues and expenditures
1. Listing 4.0042 million yuan of expenditures in violation of regulations:
(1) In 2014, its affiliated Town Center, using fake consultancy service agreements and bills, listed 3.8515 million yuan of expenses in the name of expenses on consultancy and planning.
(2) From Jan. to June 2013, its affiliated Town Center listed 195,700 yuan of expenses in the name of consultancy charges. In reality, the money was used to by shopping cards to be distributed to its staff members as welfare.
(3) In June 2014, its affiliated Land Development and Regional Economy Institute (hereinafter referred to as Land Institute), in the name of purchasing computer consumption and office appliances, listed 20,000 yuan from fund for research topics to buy shopping cards to be distributed to members of the group for research topics.
(4) From Feb. 2009 to July 2014, 20 staff members of its affiliated Energy Research Institute, in the name of conference fees and costs for meals, listed 207,000 yuan from the fund for research topics, actually to be used for hotel consumption cards in the name of individuals.
2. From Nov. 2013 to Feb. 2015, its affiliated Town Center, under the circumstances that more than 1,000 square meters of office buildings were remaining idle, rented 3,894.37 square meters (of which 594 square meters had remained idle) of office buildings.
3. In 2014, its affiliated Town Center and Comprehensive Transportation Institute respectively distributed 10.0192 million yuan and 4.8907 million yuan of salaries beyond the prescribed overall plan.
4. In Dec. 2010, its affiliated Training Center, without approval, self-decided to relocate and vacate one training base and obtained 24,356 million yuan of compensation. 19.1588 million yuan of the amount were not handed in to the state treasury in violation of regulations. In July 2011, that center appropriated 23.0164 million yuan of compensation (after tax deduction) to its subordinate units to be used for purchasing 2 sets of commercial housing and decorations at the cost of 15.1555 million yuan. Up to the end of 2014, the above-mentioned fixed assets had not been entered in the account. 3.5116 million yuan of capital were privately deposited in off-the book account.
5. From 2009 to 2014, 3 units, namely, its affiliated Capital Construction Property Management Center, a subordinate unit of the Training Center and an enterprise affiliated to the Academy of Macroeconomic Studies, without approval, rented out estate whose property rights belonged to NDRC. They obtained a total of 65.6972 million yuan (of which 23.9667 million yuan in 2014) from the rent and did not hand in the incomes to the state treasury.
6. A subordinate unit of its affiliated Academy of Macroeconomic Studies, without approval, rented out and operated 3 estate owned by the Academy. In 2013 and 2014, it obtained 7.6264 million yuan and 8.7143 million yuan respectively, which were not incorporated into the unified accounting and management of the Academy.
7. In April 2013 and Jan. 2014, a subordinate unit of its affiliated Academy of Macroeconomic Studies, without asset appraisal, transferred the nursery stock and attached facilities of a nursery cultivation base (which was Sate assets) to a natural person. The incomes from the transfer totaled 3.42 million yuan.
8. In 2014, its affiliated China Pricing Association, without approval, collected 294,100 yuan as charges for handling certificates of pricing supervision and law enforcement for nationwide pricing administrative and law-enforcement personnel. It laid down, in violation of regulation, pre-set conditions for the re-registration of pricing appraisers. It got 1.0193 million yuan of incomes from organizing relevant training and examinations.
9. In 2013, its affiliated China Investment Association (hereinafter referred to as Investment Association), in violation of regulations, collected 1.3487 million yuan of charges from participating enterprises and intermediaries through choosing through appraisal “quality investment projects of the State 2012-2013”.
10. In May 2014, an internal organ of its affiliated Investment Association signed agreements with 2 enterprises. It collected, in violation of regulations, 1.2 million yuan of intermediary charges for project initiation under such terms as assisting enterprises to obtain permission for project initiation, preferential policies and supporting fund from the State.
11. From 2013 to 2014, its affiliated China Association for Tendering and Bidding, without signing any written agreement, entrusted a company with the management of continued education of bid-callers. It transferred 1.5498 million yuan of incomes from that company, which should be handed over to the superior level according to the agreement of the two sides, to the Association’s subordinate units without incorporating into the Association’s statutory accounting book for calculation.
12. In 2014, as a matter of record, the standard for collection of charges from the training of professional managers by its affiliated China Human Resources Development Research Institute, was 7,080 yuan per person. In reality, it collected charges beyond the set standard at 8,980 yuan per person for medium level managers, 12,980 yuan per person for senior managers and 18,200 yuan per person for special-grade managers.
13. Up to the end of 2014, NRDC at its owl level bought 2 sets of software without incorporating them into assets management, involving 118,000 yuan.
14. its affiliated Comprehensive Transportation Institute and Land Institute respectively listed 171,600 yuan and 54,600 yuan under the item of research topics fund in violation of regulations.
15. Its affiliated Academy of Macroeconomic Studies and its subordinate units did not check up accounts for a long time. Part of the current accounts was not kept on accounts. Bu the end of 2014, there were a disparity of 15.1165 million yuan between the accounts of the two sides.
III. Audit process and recommendations
With respect to the above-mentioned problems, CNAO produced an audit report according to law and issued an audit decision paper. Regarding the use of stand-by fund for project expenditures resulting in carryover, it has required strict implementation of the regulations for the use of stand-by fund. Regarding extra-budgetary expenditures on staffing fund, it has required strict management of budget. Regarding problems in the use of fund for “three public expenses” and conference fees, it has required stepping up the management of public hospitalities and conferences, retrieval of the extra spending on plane tickets to be borne by responsible individuals and adjustment of the final accounts (draft). Regarding listing expenditures in violation of regulations, it has required retrieval of relevant capital, adjustment of relevant accounting records and the final accounts (draft) and holding relevant personnel accountable. Regarding idle office buildings resulting losses and waste, it has required rectification. Regarding distribution of salaries beyond the overall plan, it has required adoption of effective measures and controlling expenditures on staffing salaries in real earnest. Regarding disposal of state assets without approval, failure to hand in the incomes from the disposal to the state treasury and deposit public money in private accounts in violation of regulations, it has required making a supplementary report on the application of procedures for the disposal of state assets, handing in relevant incomes from the disposal to the state treasury and holding responsible persons accountable according to regulations. Regarding renting out estate without approval and failure to hand in the incomes from the rent to the state treasury, it has required making a supplementary report for the approval of relevant procedures and handing in the incomes to the state treasury. Regarding renting out estate without approval and failure to incorporate the incomes into unified accounting and management of the Academy of Macroeconomic Studies, it has required making a supplementary report on the application for approval and incorporating the incomes into the unit’s budget for unified accounting and management. Regarding transfer of state assets without appraisal, it has required stepping up management of subordinate enterprises and strict implementation of relevant regulations on the management of state assets. Regarding collecting charges from handling certificates for supervision and law-enforcement of pricing without approval, it has required putting an end to the act of fee-collection and submitting reports for approval when it is indeed necessary to collect charges. Regarding holding compulsory training by relying on registration of price appraisers, it has required rectification. Regarding collecting charges for appraisal from enterprises in violation of regulations, it has required stop to fee-collections. Regarding collection of charges from enterprises in the name of research topics fund as intermediary for project initiation, it has required rectification. Regarding failure to incorporate incomes from continued education into statutory book for accounting, it has required incorporating off-the-book incomes into the statutory book, signing cooperation agreement according to regulations and standardizing management. Regarding collecting charges beyond the set standard, it has required rectification. Regarding irregular accounting by accountants, it has required adjustment of relevant accounting records and the final accounts (draft). Regarding considerable disparities between current records, it has required loosing no time to streamline the current records.