China Guidong County 2021

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Actual transfer outturns for 2016, 2017 and 2018 were 204.8%, 253.1% and 109.4% of the original budget, respectively. They were above 116% of the original budget estimate in two of the last three FYs.

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The variance in transfer composition of ear-marked grants was 65.5%, 80.5% and 14.0% for FYs 2016-2018, respectively. It was higher than 15% for two of the completed FYs.

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A disbursement timetable is prescribed by law. Over 75 percent of actual transfers were on time in one of the last three years.

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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 year.

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HLG-2 is a pilot indicator. Guidong County government chose not to use this indicator in this assessment.

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Aggregate expenditure outturn deviated significantly from the budgeted amounts in the last three FYs, amounting to 165.0%, 206.8% and 109.6% of the approved budget, respectively.

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Variance in expenditure composition by functional classification was more than 15% for each of the last three years. The variances of the three years are 60.2%, 62.7% and 46.6%, respectively.

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2016-2018, there was no economic classification for governmental funds.

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In the last three FYs, the budget for contingency reserves was arranged but not used. Therefore, actual expenditure charged to a contingency vote was on average less than three percent of the original budget.

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In 2016, 2017 and 2018, actual aggregate revenue outturn was 89.5%, 107.9% and 83.6% of budgeted revenue, respectively. The performance is less than required for a C score.

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Composition variance in revenue collection in the last three FYs was 48.2%, 29.4% and 23.8% respectively, all more than 15%.

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

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Budget documentation contains three basic elements and two additional elements.

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There are three public hospitals with extrabudgetary activities. However, all extrabudgetary expenditures were recorded in the financial reports of the Health Bureau in the last three FYs.

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There are three public hospitals with extrabudgetary activities. However, all extrabudgetary revenues were recorded in the financial reports of the Health Bureau in the last three FYs.

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Financial reports of all extrabudgetary activities, containing full information on revenue, expenditure, financial and tangible assets, liabilities, guarantees, and long-term obligations, and supported by a reconciled cash flow statement, are submitted to the SNG annually within one month of the end of the FYs.

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

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

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16.42% of expenditures of service delivery units have a framework of PIs relating to the outputs or outcomes.

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The 14 largest service delivery departments published the performance achieved in FY 2018 on their websites. Information on activities performed covered 18.88% of total expenditures of service delivery units.

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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.

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Independent evaluations of the efficiency or effectiveness of service delivery were not carried out between 2016 and 2018.

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The Guidong Government made available to the public three basic elements within the specified time frame.

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Nine of the ten largest PCs in Guidong submitted financial reports to the controlling entities within four months after the end of the FY.

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There are no SNGs within Guidong.

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There are no state insurance schemes, PPP projects, guarantees or any other contingent liabilities in Guidong.

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Economic analyses are conducted according to national guidelines to assess all major investment projects, and are reviewed by a third party (DRB); but they are not published.

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The Guidong DRB is responsible for selecting the projects and making proposals to the County Committee. But no clear criteria are provided for project selection.

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

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The total costs and physical progress of only part of the major investment projects are monitored monthly throughout project duration by the Guidong DRB. Information on the implementation of ‘major investment projects’ is prepared annually but not published. Standard procedures and rules governing project implementation are available.

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The Guidong Government maintains records of its holdings in all major categories of financial assets (including cash, term deposits, account receivables, leases, equity). The information is not available to the public.

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The Guidong Government maintains records of its holdings of fixed assets and collects partial information on their usage and age. The information is mostly not available to the public.

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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.

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Domestic and foreign debt records are complete, accurate, updated monthly, and reconciled annually. Comprehensive management and statistical reports covering debt service, stock, and operations are produced annually.

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The Guidong Bureau of Finance is the responsible debt management entity and is authorized to borrow on behalf of the county government and monitor the financing transactions according to the debt management rules. Annual borrowing is approved by the Guidong People’s Congress.

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There is no mid-term DMS indicating the risk indicators such as interest rates, exchange rates, and refinancing alternatives.

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Budget preparation is based on information of transfers, revenue and expenditure.

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It is not clear whether Guidong prepares estimates of the fiscal impact of policy changes for the budget year.

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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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A clear annual budget calendar exists and is adhered to. Four weeks are provided to allow budgetary units to complete their detailed estimates. All budgetary units are able to complete their estimates on time.

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The expenditure ceilings approved by the cabinet were provided on November 16, 2018, after the distribution of the budget circular to the budgetary units, but before the budgetary units completed their submission on November 21, 2018.

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Only in one of the last three years, the executive submitted the annual budget proposal to the legislature at least one month before the start of the FY.

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Budget scrutiny by the Guidong People’s Congress covers details of expenditure and revenue, and fiscal policies, but not medium-term fiscal forecasts and medium-term priorities.

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A set of Laws and Rules stipulate the legislative procedures for budget scrutiny. The procedures include arrangements for public consultation, as well as internal organizational arrangements, such as the role of standing committees and budget committees in the County People’s Congress. The procedures are partly adhered to.

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The county legislature approved the annual budget proposal before the start of the FY in all of the last three years.

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Clear rules for budget adjustments exist, and they are adhered to in most instances.

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Core taxes - the major direct taxes (corporate income tax and individual income tax) and major indirect tax (VAT) - have been administrated and collected by the State Tax Administration and its subordinate entities at provincial and county level. Governments at county level are not authorized to administrate and collect these core taxes. PI-19 is NA.

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Core taxes - the major direct taxes (corporate income tax and individual income tax) and major indirect tax (VAT) - have been administrated and collected by the State Tax Administration and its subordinate entities at provincial and county level. Governments at county level are not authorized to administrate and collect these core taxes. PI-19 is NA.

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Core taxes - the major direct taxes (corporate income tax and individual income tax) and major indirect tax (VAT) - have been administrated and collected by the State Tax Administration and its subordinate entities at provincial and county level. Governments at county level are not authorized to administrate and collect these core taxes. PI-19 is NA.

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Core taxes - the major direct taxes (corporate income tax and individual income tax) and major indirect tax (VAT) - have been administrated and collected by the State Tax Administration and its subordinate entities at provincial and county level. Governments at county level are not authorized to administrate and collect these core taxes. PI-19 is NA.

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The Treasury Office of the Guidong Finance Bureau obtains revenue data from the departments responsible for collecting fiscal revenue (the Taxation Bureau and the Non-Tax Revenue Administration) and compiles a monthly unified income completion statement which details the monthly completion and cumulative completion for each revenue type.

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All tax revenues are transferred to the Guidong County Treasury on a daily basis, while non-tax revenues are paid directly into the special accounts under the TSA system.

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

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The Guidong Finance Bureau obtains a daily balance report from the Treasury, and the balances of special accounts are consolidated monthly. Most cash balances are therefore consolidated on a monthly basis, the balance of the Treasury that is consolidated daily accounting for 43%.

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Except for monthly forecasting on tax income, Guidong Finance Bureau has not conducted cashflow forecasting and monitoring.

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Payments can be largely made within the approved budget. Expenditure commitment ceilings are not effectively applied.

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Significant in-year budget adjustments to budget allocations are frequent, and are partially transparent.

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Since Guidong county has not set up a monitoring system for all expenditure arrears, data on the stock of arrears for 2016-2018 are not available.

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Expenditure arrears monitoring system has been generated for project expenditures but not for recurrent ones.

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The approved employee list, personnel database, and payroll are linked to each other through the documents approved and reconciled monthly before payoff, which constitutes an effective assurance for budget control and data consistency.

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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 Centre. Retroactive adjustment is rare.

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The authority to change personnel records and payrolls is restricted, with separate posts and system privileges, results in an audit trail, and is adequate to ensure full integrity of the data.

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Partial payroll audits were undertaken within the last three completed FYs.

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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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The procurement complaint handling mechanism meets every criterion.

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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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No effective expenditure commitment control system has been established.

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All the payments are in line with regular payment procedures, and all exceptions are authorized in advance.

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Internal audit is operational for budgetary units representing all of the budget revenues but less than 50% of the budget expenditures.

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Internal audit activities are focused on verifying the adequacy and effectiveness of internal control. The internal audit function has no established quality assurance process but audit activities meet professional standards, including the adoption of a risk-based approach.

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The one department with an internal audit unit prepares an annual audit work plan and a summary report of its annual audit work, which shows the completion rate of the planned internal audit tasks. The 2018 annual audit plan was fully completed.

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Management of the sampled department proactively responded to the auditors’ suggestions included in the audit reports within 12 months after the audit reports were issued.

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Reconciliation of all active government bank accounts is completed within 5 days after the end of each month.

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There is no suspense account in Guidong County.

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There is no advance account in Guidong County.

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Access and changes to the financial records are restricted and can be traced , but the financial network has not passed the second level computer information system security protection certification, and there is no unit in charge of verifying financial data integrity.

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There are monthly reports and analyses on budget execution. Coverage and classification of data allow for direct comparison to the original budget. All revenues and expenditures, including those from transfers to de-concentrated units within the SNG, are included in the in-year budget reports.

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There are monthly reports and analyses on budget execution released within ten days of the end of the reported period.

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The in-year budget report data are largely consistent and useful for the analysis of budget execution. An analysis report is prepared on a monthly basis. Information is captured at all payment stages. The reports, however, were not audited.

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An annual budget execution report is prepared and is comparable with the approved budget. The report includes information on revenues, expenditures, cash balances, and liabilities, but not on financial assets or tangible assets.

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Budget execution reports for budgetary units are submitted to the County Audit Office within 3 months of the end of the FY.

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The budget execution reports are prepared in line with the national standards stipulated by MOF. However, the accounting standards adopted are not disclosed in notes or other parts of the financial reports.

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In the past three FYs, the Guidong Audit Office conducted the annual budget execution audit and the economic responsibility audits for a certain number of budgetary units. However, it did not conduct budget execution audits of any departments.

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During the past three FYs, the Audit Office submitted the audit reports to the legislature within six months after receiving the financial reports.

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The rectification reports show that in the last three FYs, required follow-up actions were taken by the related entities effectively and timely to respond to the issues disclosed by the auditors.

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The Audit Office operates independently from the executive with respect to procedures for appointment and removal of the Head of the institution, the planning of audit engagements, and the approval and execution of the institution’s budget.

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Scrutiny of the audit reports was completed by the Standing Committee of the County People’s Congress within one month in all three FYs from receipt of the reports.

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An in-depth hearing take place on the main findings of the audit report once every year. Some audited entities which received a qualified or adverse audit opinion or disclaimer in the audit report participate in the hearing.

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Once receiving the follow-up reports from auditees, a summarized report was prepared by the Audit Office and submitted to the Standing Committee in two consecutive years, except for FY 2016. Following this, an official meeting was organized to hear the remedial actions being taken.

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The hearings on the audit report for FY 2018 was not open to the public, and the follow-up report for FY 2018 was not published on the government’s website.