No. 25 of 2015 (General Serial No. 222):
Results of the Investigation on Budget Implementation and Other Financial Revenues and Expenditures of the National Audit Office for the Year 2014
(Announced on June 28, 2015)
To strengthen the oversight over the budget implementation and other financial revenues and expenditures of the National Audit Office of China (CNAO), from March to April 2015, an inspection team was formed consisting of special auditors and professionals engaged by the CNAO, which investigated the budget implementation and other financial revenues and expenditures of CNAO for the year 2014, focusing on investigating the CNAO level itself and 7 of its affiliated units including the Computer Technology Center (hereinafter referred to as the Computing Center); the investigation was also extended to relevant matters.
I. Overview
CNAO is a central finance level budget unit. Its departmental budget is composed of the budgets at the Office level and 28 second-level budget units. The Ministry of Finance approved 1,566.5727 million yuan as CNAO’s departmental financial allocation for budget expenditures for the year 2014; according to CNAO’s final accounts (draft), the current year financial allocation expenditures were 1,207.2497 million yuan, the difference between the departmental budget and implementation results amounted to a total of 359.323 million yuan. The specific situation and causes of the difference are listed in Annex 1.
Financial allocation for the year 2014 at the CNAO level and its affiliated units included in the current investigation totaled 801.6694 million yuan, accounting for 51.17% of the total departmental financial allocations. The investigation found that, in budget implementation, 4.4997 million yuan failed to comply with financial regulations, of which 3.0588 million yuan occurred in 2014; in other financial revenues and expenditures, 2.017 million yuan failed to comply with financial regulations. The impact of the above issues on CNAO’s 2014 budget implementation results are listed in Annex 2.
Results of the investigation show that, at the CNAO level and the affiliated units investigated, budget implementation in 2014 was basically in compliance with the Budget Law and other financial laws and regulations, financial management and accounting practice were basically in keeping with the provisions of the Accounting Law and relevant accounting regulations.
II. Major Problems Found in the Investigation
(A) Major problems in budget implementation.
1. As of the end of 2014, one project of its affiliated Training Center had a financial allocation balance of 1.4409 million yuan, which failed to be included in the table of balance funds carried over from 2014 to be activated and cleaned up.
2. In 2014, due to insufficient allocation for personnel funds, 6 of its affiliated units, namely: the Computing Center, Audit Research Institute, Audit Museum, Training Center, Foreign Loans and Grants Project Audit Services Center and China Auditing Society, charged a total of 2.8464 million yuan of personnel funds to public expenditures or project expenditures.
3. In 2014, its affiliated Chengdu Resident Audit Office and the Computing Center arbitrarily adjusted the use of budget funds and charged 212,400 yuan of hired personnel labor costs and social insurance fees to project expenditures.
(B) Major problems in other financial revenues and expenditures.
In 2014, its affiliated Computing Center placed special funds and relevant expenditures of 2 projects under current item accounting, understating 2.017 million yuan in revenues and 1.2966 million yuan in expenditures.
III. Treatment of Issues Found in the Investigation
With respect to the above issues, the inspection team has issued inspection reports in accordance with provisions. Regarding the issue of insufficient clean up of balance funds, it is requested that these be cleaned up and reported to the Ministry of Finance as soon as possible, and handled in accordance with the Ministry of Finance’s examination opinion; regarding the issue of insufficient personnel funds, and arbitrarily charging personnel expenses to public funds, it is requested that implementation be in strict accordance with the budget law and relevant provisions, relevant accounting records and the final accounts (draft) be adjusted, and consultation with the Ministry of Finance be held to resolve the problem of insufficient personnel funds; regarding the issue of arbitrarily adjusting the use of budget funds, it is requested that relevant provisions be strictly implemented and relevant accounting records and the final accounts (draft) be adjusted; regarding the issue of understating revenues and expenditures, it is requested that relevant accounting records and the final accounts (draft) be adjusted.
IV. Rectification Measures and Rectification Situation of Issues Found in the Investigation
Regarding the issues found in the investigation, the CNAO earnestly arranged for rectification, identified item by item the persons responsible for their rectification and the deadlines. Regarding the issue of charging hired logistics personnel labor costs to project expenditures, the Chengdu Resident Office has adjusted relevant accounting records; regarding the issue of understating revenues and expenditures, the Computing Center has confirmed the revenues and expenditures; regarding insufficient clean up of the Training Center’s balance funds, the CNAO is organizing settlement; regarding using project funds to make up for insufficient personnel expenses, the CNAO will resolve the issue comprehensively during institutional unit reform.
Annex: 1. Overview regarding implementation of CNAO’s finance allocation budget for 2014.
2: Situation regarding implementation of the finance allocation budget for 2014 of the CNAO’s key units investigated.