SNG PILLAR: INTERGOVERNMENTAL FISCAL RELATIONS
Scores by Dimension
Overall Indicator Score
HLG-1 Transfers from Higher Levels of Government
D
Notes:
HLG-1.1 Outturn from higher-levels of government
D
Notes:
Actual transfer outturns for FY 2016, 2017, and 2018 were 151.27%, 86.66%, and 95.16% of the original budget, respectively. While deviation declined, the outturn was above 116 or below 92 percent for two of the three FYs.
HLG-1.2 Transfers composition outturn
D
Notes:
The composition variance of earmarked grants in FY 2016, 2017, and 2018 was 42.00%, 59.60%, and 29.80%, respectively. The composition variance was above 15% in all three FYs.
HLG-1.3 Timeliness of transfers from higher-levels of government
C
Notes:
A disbursement timetable is prescribed by law and agreed between the HLG and the County Government. In two of the last three completed FYs, more than 50% (but less than 75%) of actual transfers were on time.
HLG-1.4 Predictability of transfers
D
Notes:
The HLG provides only partial information on transfers for the coming FY, and there is no explanation for changes between the current and the previous FY.
HLG-2 Fiscal rules of monitoring of fiscal position
NU
Notes:
HLG-2.1 Fiscal rules for subnational governments
NU
Notes:
HLG-2 is a pilot indicator. China’s central MOF has set up a set of fiscal rules for SNGs, but they are not disclosed to the public. The Chaling County Government chose not to use this indicator in this assessment.
HLG-2.2 Debt rules for subnational governments
NU
Notes:
HLG-2 is a pilot indicator. China’s central MOF has set up a set of fiscal rules for SNGs, but they are not disclosed to the public. The Chaling County Government chose not to use this indicator in this assessment.
HLG-2.3 Monitoring of subnational governments
NU
Notes:
HLG-2 is a pilot indicator. China’s central MOF has set up a set of fiscal rules for SNGs, but they are not disclosed to the public. The Chaling County Government chose not to use this indicator in this assessment.
I. BUDGET RELIABILITY
Scores by Dimension
Overall Indicator Score
PI-1 Aggregate expenditure out-turn
D
Notes:
PI-1.1 Aggregate expenditure out-turn
D
Notes:
Aggregate expenditure outturn deviated significantly from the budgeted amounts in the last three FYs. The outturn was 232.67%, 220.63%, and 211.28% of the approved budget, respectively.
PI-2 Expenditure composition outturn
D+
Notes:
PI-2.1 Expenditure composition outturn by function
D
Notes:
Variance in expenditure composition by functional classification was above 15% in each of the last three FYs. Variance was 42.09%, 54.48%, and 55.40% for FY 2016, 2017, and 2018, respectively.
PI-2.2 Expenditure composition outturn by economic type
NA
Notes:
There was no economic classification for the GFB in FYs 2016-2018 (referring to PI-4.1).
PI-2.3 Expenditure from contingency reserves.
A
Notes:
In FYs 2016-2018, actual expenditure charged to a contingency vote was on average 1.4% of the original budget (i.e. less than 3% of the original budget).
Notes:
PI-3.1 Agregate revenue outturn
D
Notes:
In FYs 2016 - 2018, the variance in aggregate revenue was 121.13%, 102.29%, and 117.35%, respectively. The actual revenues were above 116% of budgeted revenues in two of the three FYs.
PI-3.2 Revenue composition outturn
D
Notes:
Composition variance in revenue collection in the three FYs was 41.81%, 35.61% and 76.82%, respectively, all more than 15%.
II. TRANSPARENCY OF PUBLIC FINANCES
Scores by Dimension
Overall Indicator Score
PI-4 Budget Classification
D
Notes:
PI-4.1 Budget Classification
D
Notes:
Budget documentation is nationally consistent. The GPB is based on functional and economic classification, but the GFB is only based on functional classification.
PI-5 Budget Documentation
C
Notes:
PI-5.1 Budget Documentation
C
Notes:
Budget documentation contains three basic elements.
PI-6 Subnational government operations outside financial reports
A
Notes:
PI-6.1 Expenditure outside financial reports
A
Notes:
All expenditures are included in the budget/financial reports.
PI-6.2 Revenue outside financial reports
A
Notes:
All expenditures are included in the budget/financial reports.
PI-6.3 Financial reports of extrabudgetary units
A
Notes:
The social insurance fund budget is included in the budget execution report and submitted to the government within three months of the end of the FY.
PI-7 Transfers to subnational governments
NA
Notes:
PI-7.1 System for allocating transfers
NA
Notes:
There are no separate lower-level SNGs, rather deconcentrated units of the County Government.
PI-7.2 Timeliness of information on transfers
NA
Notes:
There are no separate lower-level SNGs, rather deconcentrated units of the County Government.
PI-8 Performance information for service delivery
C
Notes:
PI-8.1 Performance plans for service delivery
C
Notes:
Only 3.41% of ministry expenditures published for their performance plans containing key performance indicators. 65.18% of bureau expenditures published annually on the activities to be performed under the policies or programs.
PI-8.2 Performance achieved for service delivery
D
Notes:
The ministries publishing information about the quantity of outputs produced or the outcomes achieved account for 4.17% of total service delivery expenditure. 30.44% of all bureau expenditures publish annual information on their performed activities.
PI-8.3 Resources received by service delivery units
A
Notes:
Information on resources received by frontline service delivery units is collected and recorded for the selected service delivery units, disaggregated by source of funds. A report compiling the information is prepared at least annually.
PI-8.4 Performance evaluation for service delivery
D
Notes:
In FY 2018, no independent evaluations of the efficiency and effectiveness of service delivery was carried out. Self-evaluations were carried out and published for 4.17% of total service delivery expenditure. Self-evaluations were carried out and not published for 0.33% of total service delivery expenditure.
PI-9 Public access to fiscal information
D
Notes:
PI-9.1 Public access to fiscal information
D
Notes:
The Chaling Government made available to the public one basic element within the specified time frame.
9bis Public consultation
NU
Notes:
9bis.1 Public consultation in budget preparation
NU
Notes:
This is a pilot indicator. Chaling County Government chose not to use this indicator in this assessment.
9bis.2 Public consultation in the design of service delivery programs
NU
Notes:
9bis.3 Public consultation in investment planning
NU
Notes:
III. MANAGEMENT OF ASSETS AND LIABILITIES
Scores by Dimension
Overall Indicator Score
PI-10 Fiscal risk reporting
C+
Notes:
PI-10.1 Monitoring of public corporations
C
Notes:
All of the 10 largest SOEs submit their audited financial reports to the government within six months of the end of the FY. The Asset Management Unit prepares a consolidated report on the financial performance of the PC sector annually, but the consolidated report and all public enterprise financial reports are not released to the public.
PI-10.2 Monitoring of subnational governments
NA
Notes:
There are no lower-tier SNGs in Chaling.
PI-10.3 Contingent liabilities and other fiscal risks
B
Notes:
Contingent liabilities and other financial risks of Chaling County are recorded in the Government Debt Management System. The data are updated and consolidated monthly. But information on contingent liabilities is not published.
PI-11 Public investment management
D+
Notes:
PI-11.1 Economic analysis of investment proposals
C
Notes:
In FY 2018, economic analyses of all major investment projects were conducted according to national guidelines by professional institutes and reviewed by the DRB. However, results of the reports were not published.
PI-11.2 Investment project selection
C
Notes:
There are no clearly defined and published standard criteria for project selection. The government executive is responsible for selecting and prioritizing the major investment projects.
PI-11.3 Investment project costing
D
Notes:
Investment project costing information is not included in the budget documents.
PI-11.4 Investment project monitoring
C
Notes:
The MIPO monitors the total cost and physical progress monthly. Information on the implementation of major investment projects is prepared monthly.
PI-12 Public asset management
B
Notes:
PI-12.1 Financial asset monitoring
C
Notes:
The Chaling Government maintains records of its holdings in all major categories of financial assets (including cash, term deposits, account receivable, leases, equity). Information on the aggregated value of the financial assets is submitted to the People’ s Congress but is not published.
PI-12.2 Nonfinancial asset monitoring
C
Notes:
The Chaling Government maintains records of its holdings of fixed assets and collects partial information on their usage and age. The information on non-financial assets is mostly not available to the public.
PI-12.3 Transparency of asset disposal
A
Notes:
Procedures and rules for the transfer or disposal of financial and non-financial assets are established. Information on asset disposal is included in the state-owned assets management report submitted to the People’ s Congress.
Notes:
PI-13.1 Recording and reporting of debt and guarantees
C
Notes:
Debt records are complete, accurate, and updated when transactions are made. They are updated monthly via the debt management system. Reconciliations are performed annually, the relating information being recorded in the system.
PI-13.2 Approval of debt and guarantees
A
Notes:
The Chaling Finance Bureau is the responsible debt management entity and is authorized to borrow on behalf of the County Government and monitor debt transactions according to the debt management rules. Annual borrowing undergoes approval by the County People’s Congress.
PI-13.3 Debt management strategy
D
Notes:
There is no medium-term DMS including target ranges for indicators such as interest rates, refinancing or foreign currency risks.
IV. POLICY-BASED FISCAL STRATEGY AND BUDGETING
Scores by Dimension
Overall Indicator Score
PI-14new Medium term budget strategy
D+
Notes:
PI-14new.1 Underlying forecasts for medium-term budget
C
Notes:
Budget preparation is based on information of transfers, revenue, and expenditure, but the referred data are not submitted to the legislature. There is no evidence budget preparation is built on projections of macroeconomic indicators or fiscal and sectoral strategies. Estimates of revenue and expenditure for the two following FYs are not prepared.
PI-14new.2 Fiscal impact of policy proposals
D
Notes:
There are no estimates of the fiscal impact of proposed changes in revenue and expenditure policy for the FY.
PI-14new.3 Medium-term expenditure and revenue estimates
D
Notes:
No medium-term expenditure and revenue estimates are prepared.
PI-14new.4 Consistency of budgets with previous year's estimates
NA
Notes:
No medium-term expenditure and revenue estimates are prepared.
PI-14 Macroeconomic and fiscal forecasting
NU
Notes:
PI-14.1 Macroeconomic forecasts
NU
Notes:
PI-14.2 Fiscal forecasts
NU
Notes:
PI-14.3 Macro-fiscal sensitivity analysis
NU
Notes:
Notes:
PI-15.1 Fiscal impact of policy proposals
NU
Notes:
PI-15.2 Fiscal strategy adoption
NU
Notes:
PI-15.3 Reporting on fiscal outcomes
NU
Notes:
PI-16 Medium term perspective in expenditure budgeting
NU
Notes:
PI-16.1 Medium-term expenditure estimates
NU
Notes:
PI-16.2 Medium-term expenditure ceilings
NU
Notes:
PI-16.3 Alignment of strategic plans and medium-term budgets
NU
Notes:
PI-16.4 Consistency of budgets with previous year estimates
NU
Notes:
PI-17 Budget preparation process
B
Notes:
Notes:
A clear annual budget calendar exists and is adhered to. It allows all budgetary units more than 6 weeks from receipt of the budget circular to meaningfully complete their detailed estimates on time.
PI-17.2 Guidance on budget preparation
B
Notes:
The budget circular covers total budget expenditure for the full FY. Though the exact date is not available, the approved expenditure ceilings were provided after the distribution of the budget circular to the budget units, but before the budget units submitted their revised budget.
PI-17.3 Budget submission to the subnational council
D
Notes:
Budget submission to the legislature took place after the start of the FY for two of the three FYs.
PI-18 Legislative scrutiny of budgets
C+
Notes:
PI-18.1 Scope of budget scrutiny
B
Notes:
Budget scrutiny by the Chaling People’s Congress covers details of expenditure, revenue, and fiscal policies, but not medium-term fiscal forecasts and medium-term priorities.
PI-18.2 Legislative procedures for budget scrutiny
B
Notes:
Procedures for reviewing budget proposals are approved by the Chaling People’s Congress in advance of budget hearings and are adhered to. The legislature carries out an array of organizational arrangements, including a technical discussion held by a specialized review committee, preliminary budget scrutiny, negotiation of the budget proposals with representatives of the functional departments, and re-submission of the budget proposals. However, no public consultation takes place.
PI-18.3 Timing of budget approval
C
Notes:
The subnational legislature approved the annual budget within one month of the start of the FY in two of the last three FYs.
PI-18.4 Rules for budget adjustments by the executive
C
Notes:
The Budget Law sets rules and procedures for in-year budget adjustment by the executive. These rules are adhered to in most instances.
V. PREDICTABILITY AND CONTROL IN BUDGET EXECUTION
Scores by Dimension
Overall Indicator Score
PI-19 Tax administration
NA
Notes:
PI-19.1 Rights and obligations for tax measures
NA
Notes:
PI-19.2 Property tax register and value assessment
NA
Notes:
PI-19.3 Tax risk management, audit and investigation
NA
Notes:
PI-19.4 Tax arrears monitoring
NA
Notes:
PI-20 Accounting for revenue
A
Notes:
PI-20.1 Information on revenue collections
A
Notes:
The Chaling Government obtains revenue data at least monthly from the collecting units. The information is consolidated into a report, broken down by revenue type.
PI-20.2 Transfer of revenue collections
A
Notes:
All tax revenues collected are transferred directly to the TSA on a daily basis. Units collecting non-tax revenue transfer all collections directly to a special account under the TSA system, almost all of them daily.
PI-20.3 Tax accounts reconciliation
NA
Notes:
Governments at county level are not authorized to administrate and collect taxes. The duty of tax revenue reconciliation is NA.
PI-21 Predictability of in-year resource allocation
D
Notes:
PI-21.1 Consolidation of cash balances
C
Notes:
The bank account balances of the Treasury accounts are consolidated daily, while the bank account balances of special accounts are consolidated monthly. Therefore, all bank account balances are consolidated at least monthly.
PI-21.2 Cash forecasting and monitoring
D
Notes:
The Chaling Finance Bureau does conduct comprehensive cash flow forecasting and monitoring.
PI-21.3 Information on commitment ceilings
D
Notes:
Budgetary units are not provided reliable information on commitment ceilings.
PI-21.4 Significance of in-year budget adjustments
D*
Notes:
Significant budget adjustments happen, but details for each budget adjustment are not available.
PI-22 Expenditure arrears
D
Notes:
PI-22.1 Stock of expenditure arrears
D*
Notes:
Since Chaling County has not set up a monitoring system for expenditure arrears, data on the stock of arrears are not available.
PI-22.2 Expenditure arrears monitoring
D
Notes:
There is no monitoring system for expenditure arrears in Chaling County.
Notes:
PI-23.1 Integration of payroll and personnel records
A
Notes:
The approved employee list, personnel database, and payroll are directly interlinked to each other through an IT system and updated on real time basis, effectively ensuring budget control, data consistency, and monthly reconciliation.
PI-23.2 Management of payroll changes
B
Notes:
Necessary changes to personnel records and payrolls are updated in real time. There is no delay in payroll payments by the centralized payment center. There are few retroactive adjustments.
PI-23.3 Internal control of payroll
A
Notes:
A complete internal control system is in place for changes to the payroll. The e-financial management system assigns unique passwords and identification numbers to each approver to ensure the approval process can be traced and the integrity of data is warranted.
Notes:
A special review team to identify and prevent the occurrence of ghost employees inspects all budgetary units once a year. The Audit Bureau conducted an independent audit on the Wage Payment Centre of the Finance Bureau, covering the payroll of all units in the county for two of the last three completed FYs.
Notes:
PI-24.1 Procurement monitoring
D*
Notes:
The contract data for small contracts are not available, and there is no sound document to facilitate the assessment of this dimension.
PI-24.2 Procurement methods
D*
Notes:
Since contract data for small contracts are not available, it is not feasible to calculate the total value of contracts awarded through competitive methods.
PI-24.3 Public access to procurement information
D
Notes:
One out of six criteria is met.
PI-24.4 Procurement complaints management
A
Notes:
The procurement complaint handling mechanism meets all six criteria.
PI-25 Internal controls on nonsalary expenditure
B
Notes:
PI-25.1 Segregation of duties
A
Notes:
Segregation of duties is prescribed throughout the whole budget execution process with responsibilities clearly defined for each stage.
PI-25.2 Effectiveness of expenditure commitment controls
D
Notes:
No effective expenditure commitment control system has been established.
PI-25.3 Compliance with payment rules and procedures
A
Notes:
Compliance with payment rules and procedures is very high (more than 90%), and all exceptions are authorized in advance.
Notes:
PI-26.1 Coverage of internal audit
D
Notes:
In 2019, no budget unit in Chaling implemented internal audit, but the Education Bureau and the Transportation Bureau which accounted for 28.54 percent of total budgeted expenditure have set up the internal audit units.
PI-26.2 Nature of audits and standards applied
D
Notes:
In Chaling, the audits and standards primarily focused on financial compliance.
PI-26.3 Implementation of internal audits and reporting
D
Notes:
The Health Commission Bureau of Chaling implemented internal audit in from 2016 to 2019, and in 2016 and 2017, the Education Bureau also conducted internal audit. Thus, in 2018, only Health Commission Bureau in Chaling implemented internal audit.
PI-26.4 Response to internal audits
D
Notes:
During 2016 to 2018, no budget unit in Chaling implemented internal audit.
VI. ACCOUNTING AND REPORTING
Scores by Dimension
Overall Indicator Score
PI-27 Financial data integrity
B+
Notes:
PI-27.1 Bank account reconciliation
B
Notes:
The TSA is reconciled daily, while the special bank accounts are reconciled once a month within 10 days of the end of the month.
PI-27.2 Suspense accounts
NA
Notes:
There are no suspense account in Chaling County.
PI-27.3 Advance accounts
NA
Notes:
There are no advance account in Chaling County.
PI-27.4 Financial data integrity processes
A
Notes:
Access and changes to the financial records are strictly restricted and recorded, and result in an audit trail. Sound internal control and risk management procedures are in place, and the Finance Supervision Department is in charge of verifying financial data integrity.
PI-28 In-year budget reports
B+
Notes:
PI-28.1 Coverage and comparability of reports
A
Notes:
Monthly budget execution and quarterly analysis reports are prepared. Coverage and classification of data are comparable with the original budget. All revenues and expenditures including those from transfers to deconcentrated SNG units are included in the in-year budget reports.
PI-28.2 Timing of in-year budget reports
B
Notes:
The budget execution reports are prepared monthly and mostly published on the website of the Finance Bureau within two weeks after the end of the reported month (with some slight delays).
PI-28.3 Accuracy of in-year budget reports
B
Notes:
There are no concerns regarding data accuracy. Data are reliable and useful for the analysis of budget execution. An analysis of budget execution is prepared quarterly. Information on expenditure is captured at payment stage.
PI-29 Annual financial reports
D+
Notes:
PI-29.1 Completeness of annual financial reports
C
Notes:
Annual budget execution reports are prepared and are comparable with the approved budget. The reports include information on revenue, expenditure, and cash balances.
PI-29.2 Submission of reports for external audit
B
Notes:
The 2018 budget execution report was submitted to the Audit Bureau within 6 months of the end of the FY.
PI-29.3 Accounting standards
D
Notes:
The budget execution reports for FY 2016-2018 were prepared in line with the national standards stipulated by the MOF. However, the accounting standards adopted were not disclosed in notes or other parts of the financial reports.
VII. EXTERNAL SCRUTINY AND AUDIT
Scores by Dimension
Overall Indicator Score
Notes:
Notes:
In FYs 2016-2018, 8 of all 13 budget units carried out external audit, the expenditure of audited budget units accounted for 71.54% of total expenditures.
PI-30.2 Submission of audit reports to the subnational council
B
Notes:
In FYs 2016-2018, the audit reports on budget execution were submitted to the City People’s Congress within 9 months upon receipt of the financial reports.
PI-30.3 External audit follow-up
A
Notes:
The rectification reports show that in FYs 2016-2018, required follow-up action on the issues disclosed by auditors was taken by the concerned entities effectively and timely.
PI-30.4 Independence of the public audit institution in charge of subnational governments
B
Notes:
The Audit Law and related regulations provide concrete basis to secure the independence of the SAI. Although the Audit Office is one of the line bureaus under the leadership of the County Government and uses executives to assist with the procedure for budget request submission and execution, the executives do not interfere in the budget approved by the People’s Congress for the SAI.
PI-31 Legislative scrutiny of audit reports
B
Notes:
PI-31.1 Timing of audit report scrutiny
A
Notes:
The time period between the issuance of the audit report and its scrutiny by the People’s Congress was less than three months for all FYs 2016- 2018.
PI-31.2 Hearings on audit findings
C
Notes:
Only the heads of the Finance Bureau and Audit Bureau attend the hearing on audit findings organized by the People’s Congress. The representatives of the budget units with issues being disclosed by auditors are not required to attend the hearing.
PI-31.3 Recommendations on audit by subnational council
A
Notes:
The subnational legislature issues recommendations on actions to be implemented by the executive and systematically follows up on their implementation.
PI-31.4 Transparency of legislative scrutiny of audit reports
D
Notes:
The review process is carried out only between the members of the Standing Committee and several chiefs from the governmental departments. Access is not provided to the general public.