China Liling City 2021

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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.

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There is no information of transfer composition in the budget document, although the compositions are provided in the actual budget.

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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.

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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.

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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.

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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.

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There was no economic classification for the GFB in FYs 2016-2018.

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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).

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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.

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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.

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Budget documentation is nationally consistent. The GPB is based on functional and economic classification, but the GFB is only based on functional classification.

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Budget documentation contains three basic elements and no additional elements.

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All expenditures are included in the budget/financial reports.

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All revenues are included in the budget/financial reports.

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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.

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There are no separate lower-level SNGs, rather deconcentrated units of the city government.

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There are no separate lower-level SNGs, rather deconcentrated units of the city government.

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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.

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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.

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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.

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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.

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The Liling Government makes available to the public three basic elements within the specified time frame.

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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.

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There are no lower-tier SNGs in Liling.

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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.

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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.

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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.

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Investment project costing information is not included in the budget documents.

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The MIPO monitors the total cost and physical progress monthly. Information on implementation of major investment projects is prepared monthly.

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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.

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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.

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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.

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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.

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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.

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There is no medium-term DMS indicating risk indicators such as interest rates and refinancing, and foreign currency risks.

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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.

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There are no estimates of fiscal impact about proposed changes in revenue and expenditure policy for the FY.

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No medium-term expenditure and revenue estimates are prepared.

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No medium-term expenditure and revenue estimates are prepared.

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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.

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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.

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Budget submission to the legislature was some days before the start of the FY for two of the three FYs.

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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.

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Procedures for reviewing budget proposals are approved by the Liling People’s Congress in advance of budget hearings and are adhered to.

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The subnational legislature approved the annual budget within one month of the start of the FY in two of the last three FYs.

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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.

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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.

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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.

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Governments at county level are not authorized to administrate and collect taxes. The duty of tax revenue reconciliation is NA.

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Liling Finance Bureau obtains daily balance report from the Treasury, and the bank accounts balances of special accounts are consolidated monthly.

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Liling Finance Bureau has not conducted a comprehensive cash flow forecasting and monitoring.

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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.

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Significant budget adjustments happened more than twice. Part of the adjustments are approved by the People’s Congress of the county.

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Since Liling City has not set up a monitoring system for expenditure arrears, data on stock of arrears are not available.

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There is no monitoring system for expenditure arrears in Liling City.

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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.

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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.

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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.

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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.

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The contract data for small contracts are not available, and there is no sound document to facilitate the assessment of this dimension.

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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.

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One out of six criteria are met.

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All six criteria are met.

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Segregation of duties is prescribed throughout the whole budget execution process with responsibilities clearly defined for each stage.

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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.

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Compliance with payment rules and procedures is very high (more than 90%), and all exceptions are authorized in advance.

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During the assessment time, the expenditures of budget units implemented internal audit account for 35.3% of the total expenditures.

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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.

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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.

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There is no evidence that shows that management provides response to audit recommendations for any audited entity.

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Reconciliation of all bank accounts is completed within 15 days after the end of each month.

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There is no suspense account.

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There is no advance account.

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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.

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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.

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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.

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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.

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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.

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The 2018 budget execution report was submitted to the Audit Bureau within 3 months of the end of the FY.

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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.

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In FYs 2016-2018, the Audit Bureau audited 56.07% of budgetary expenditures at least once. The audits have highlighted any relevant significant issues.

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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.

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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.

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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.

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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.

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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.

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The subnational legislature issues recommendations on actions to be implemented by the executive and systematically follows up on their implementation.

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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.