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
B
Notes:
The outturns for FY 2016, 2017 and 2018 were 116.98%, 108.32%, and 99.37%, respectively. The deviation of actual grants from the original budgeted grants steadily declined, and actual transfers were between 94% and 112% of the original budget estimate in two of the last three years.
HLG-1.2 Transfers composition outturn
D*
Notes:
There is no information of transfer composition in the budget document, although the compositions are provided in the actual budget.
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 City Government. In all of the last three completed FY, 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-2.2 Debt rules for subnational governments
NU
Notes:
HLG-2.3 Monitoring of subnational governments
NU
Notes:
I. BUDGET RELIABILITY
Scores by Dimension
Overall Indicator Score
PI-1 Aggregate expenditure out-turn
B
Notes:
PI-1.1 Aggregate expenditure out-turn
B
Notes:
Aggregate expenditure outturn deviated slightly from the budgeted amounts in the last three FYs. The outturn was 106.12%, 107.25%, and 103.18% 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 more than 15% in each of the last three FYs. Variance of the three years was 21.33%, 17.04% and 26.03%, respectively.
PI-2.2 Expenditure composition outturn by economic type
NA
Notes:
There was no economic classification for the GFB in FYs 2016-2018.
PI-2.3 Expenditure from contingency reserves.
A
Notes:
In FYs 2016-2018, actual expenditure charged to a contingency vote was on average 0.7% of the original budget (i.e. less than 3% of the original budget).
Notes:
PI-3.1 Agregate revenue outturn
A
Notes:
In FY 2016 - 2018, the variance in aggregate revenue was 106.80%, 99.92%, and 101.27%, respectively. The actual revenues were between 97% and 106% of budgeted revenues in two of the three FYs.
PI-3.2 Revenue composition outturn
C
Notes:
Composition variance in revenue collection in the three FYs was 13.11%, 13.59%, and 79.66%, respectively. The variance was less than 15% in two of the last three years.
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 and no additional 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 revenues 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 city government.
PI-7.2 Timeliness of information on transfers
NA
Notes:
There are no separate lower-level SNGs, rather deconcentrated units of the city government.
PI-8 Performance information for service delivery
C
Notes:
PI-8.1 Performance plans for service delivery
D
Notes:
All the policy or program objectives are not published. There are 36.93% of ministries publishing annually on the activities to be performed under the policies or programs in FY 2019.
PI-8.2 Performance achieved for service delivery
D
Notes:
The information about the quantity of outputs produced or the outcomes achieved are not published. And the fraction of published annual activities performed is 36.93% among all of the ministries.
PI-8.3 Resources received by service delivery units
A
Notes:
Based on the selected Education Department and Public Health Department, the budget execution reports provide information of resources received at the service delivery level, and that this information covers all revenues.
PI-8.4 Performance evaluation for service delivery
C
Notes:
There are no published third-party evaluation and published self-evaluation. The unpublished evaluation of the efficiency or effectiveness of service delivery covered 28.33% of total service delivery expenditures in FY 2018.
PI-9 Public access to fiscal information
D
Notes:
PI-9.1 Public access to fiscal information
D
Notes:
The Liling Government makes available to the public three basic elements within the specified time frame.
9bis Public consultation
NU
Notes:
9bis.1 Public consultation in budget preparation
NU
Notes:
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
B
Notes:
PI-10.1 Monitoring of public corporations
B
Notes:
9 out of the 10 largest SOEs (accounting for 94.8 percent of total assets) published the audited financial reports within 6 months of the end of the year. A consolidated report on the financial performance of the PC sector is submitted to Liling People's Congress,but is not published by subnational government annually.
PI-10.2 Monitoring of subnational governments
NA
Notes:
There are no lower-tier SNGs in Liling.
PI-10.3 Contingent liabilities and other fiscal risks
B
Notes:
The contingent liabilities and other financial risks of Liling City are recorded in the Government Debt Management System and the Fiscal Risk Monitoring System. A monthly Government Debt report including Contingent liabilities were prepared in 2018.
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 DRB. However, results of the reports were not published.
PI-11.2 Investment project selection
C
Notes:
There is 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 implementation of major investment projects is prepared monthly.
PI-12 Public asset management
B
Notes:
PI-12.1 Financial asset monitoring
C
Notes:
The Liling government maintains records for its holdings in major categories of financial assets (including cash, term deposits, account receivable, leases, equity). The information for 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 Liling government maintains records for its holdings of fixed assets and collects partial information on their usage and age. The information on nonfinancial 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 nonfinancial 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 Liling Finance Bureau is the responsible debt management entity and is authorized to borrow on behalf of the city government, and monitor the debt transactions according to the debt management rules. Annual borrowing undergoes approval by the Liling City People’s Congress.
PI-13.3 Debt management strategy
D
Notes:
There is no medium-term DMS indicating risk indicators such as interest rates and refinancing, and 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 next two FYs are not prepared.
PI-14new.2 Fiscal impact of policy proposals
D
Notes:
There are no estimates of fiscal impact about 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:
Date of the 2019 budget circular was August 16, 2018. Deadline for submission of the budget drafts was late November 2018. I.e., there is more than 6 weeks from receipt of the budget circular to meaningfully completing detailed estimates.
PI-17.2 Guidance on budget preparation
B
Notes:
The expenditure ceilings were provided on October 30, 2018, after the distribution of the budget circular to the budget units (August 16, 2018), 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 was some days before 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 Liling 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 Liling People’s Congress in advance of budget hearings and are adhered to.
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. However, these rules are adhered to only in some 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 Liling 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 almost all the collections daily to a special account in the treasury.
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:
Liling Finance Bureau obtains daily balance report from the Treasury, and the bank accounts balances of special accounts are consolidated monthly.
PI-21.2 Cash forecasting and monitoring
D
Notes:
Liling Finance Bureau has not conducted a comprehensive cash flow forecasting and monitoring.
PI-21.3 Information on commitment ceilings
D
Notes:
Payment can be made within the approved budget. But there are large differences between the originally approved budget expenditure and the actually executed expenditure. Therefore, the expenditure ceiling for the budgetary units are largely unpredictable.
PI-21.4 Significance of in-year budget adjustments
C
Notes:
Significant budget adjustments happened more than twice. Part of the adjustments are approved by the People’s Congress of the county.
PI-22 Expenditure arrears
D
Notes:
PI-22.1 Stock of expenditure arrears
D*
Notes:
Since Liling City has not set up a monitoring system for expenditure arrears, data on stock of arrears are not available.
PI-22.2 Expenditure arrears monitoring
D
Notes:
There is no monitoring system for expenditure arrears in Liling City.
Notes:
PI-23.1 Integration of payroll and personnel records
A
Notes:
The approved employee list, personnel database and payroll are directly linked to each other through an IT system and updated on a real time basis, effectively ensuring budget control, data consistency, and monthly reconciliation.
PI-23.2 Management of payroll changes
A
Notes:
Necessary changes to personnel records and payrolls are updated in real time. There is no delay in making payroll payments by the centralized payment center. Retroactive adjustments is rare.
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.
Notes:
There is a special review team to identify and prevent the occurrence of "ghost employees", which has inspected all budgetary unit once a year. But the external auditors do not conduct special payroll audits, only partial payroll audits are conducted by internal auditors together with the economic responsibility audit.
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 the 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 are met.
PI-24.4 Procurement complaints management
A
Notes:
All six criteria are met.
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:
There are some expenditures taking place outside control. During the assessed period, cash-based accounting was still widely used in the government financial management system, and some payables were not recorded by the budget units.
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:
During the assessment time, the expenditures of budget units implemented internal audit account for 35.3% of the total expenditures.
PI-26.2 Nature of audits and standards applied
B
Notes:
Internal audit activities focus on internal control and high-risk areas. The internal audit work is guided by the Internal Audit Standards, and the internal audit has quality assurance.
PI-26.3 Implementation of internal audits and reporting
D
Notes:
In 2018, only the Education Bureau had an audit work plan. The completion rate was 100%. But Natural Resources Bureau didn’t establish an audit plan.
PI-26.4 Response to internal audits
D
Notes:
There is no evidence that shows that management provides response to audit recommendations for any audited entity.
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:
Reconciliation of all bank accounts is completed within 15 days after the end of each month.
PI-27.2 Suspense accounts
NA
Notes:
There is no suspense account.
PI-27.3 Advance accounts
NA
Notes:
There is no advance account.
PI-27.4 Financial data integrity processes
B
Notes:
Access and changes to the financial data information system must be authorized in advance and are secured by a U-shield and password. Both result in an audit trail.
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. All revenues and expenditures including those for deconcentrated SNG units are included in the in-year budget reports. Coverage and classification of data are comparable with the original budget.
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.
PI-28.3 Accuracy of in-year budget reports
B
Notes:
A set of in-year budget execution reports are prepared and data is reliable. However, information on expenditure is covered at payment and not at commitment 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, but do not provide any information on financial and tangible assets.
PI-29.2 Submission of reports for external audit
A
Notes:
The 2018 budget execution report was submitted to the Audit Bureau within 3 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, the Audit Bureau audited 56.07% of budgetary expenditures at least once. The audits have highlighted any relevant significant issues.
PI-30.2 Submission of audit reports to the subnational council
B
Notes:
In FYs 2016-2018, audit reports on budget execution were submitted to the City People's Congress within 6 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 17 days, 17 days and 27 days in 2017, 2018 and 2019, respectively, which was less than three months in each year.
PI-31.2 Hearings on audit findings
C
Notes:
Standing committee of People’s Congress scrutinize the audit report annually, and representatives from most of audited entities do not attend the hearing on audit findings.
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. There is no available access for the general public to participate.