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 2016, 2017, and 2018 were 232.7%, 170.4%, and 139.9% of the original budget, respectively, and therefore above 116% of the original budget in all three years.
HLG-1.2 Transfers composition outturn
D
Notes:
The variance of transfer composition outturn of ear-marked grants was 94.5%, 58.4%, and 18.6% for FYs 2016-2018, respectively, and therefore higher than 15% for each of the three completed FYs.
HLG-1.3 Timeliness of transfers from higher-levels of government
C
Notes:
A disbursement timetable is prescribed by law. Over 50% of actual transfers were on time in the last three completed FYs.
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 year.
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
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, amounting to 130.9%, 121.1%, and 121.8% of the approved budget respectively.
PI-2 Expenditure composition outturn
D+
Notes:
PI-2.1 Expenditure composition outturn by function
D
Notes:
Expenditure composition outturn by functional classification was above 15% in each of the three assessed years. Variance was 50.5%, 28.9%, and 35.9% for FY 2016, 2016, and 2018, respectively.
PI-2.2 Expenditure composition outturn by economic type
NA
Notes:
There was no economic classification for governmental funds in the last three completed years.
PI-2.3 Expenditure from contingency reserves.
A
Notes:
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.
Notes:
PI-3.1 Agregate revenue outturn
D
Notes:
In 2016, 2017, and 2018, aggregate revenue outturn was 55.0%, 48.1%, and 65.0% of budgeted revenue, respectively. The performance was less than required for a C score.
PI-3.2 Revenue composition outturn
D
Notes:
Composition variance in revenue collection in the last three years was 75.2%, 66.5%, and 58.0% 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:
The budget documentation contains three basic elements and two additional elements.
PI-6 Subnational government operations outside financial reports
A
Notes:
PI-6.1 Expenditure outside financial reports
A
Notes:
There are two public hospitals with extrabudgetary activities. However, all extrabudgetary expenditures were recorded in the financial reports of the Health Bureau in the last three Fys.
PI-6.2 Revenue outside financial reports
A
Notes:
There are two public hospitals in Rucheng with extrabudgetary activities. However, all extrabudgetary revenues were recorded in the financial reports of the Health Bureau in the last three FYs.
PI-6.3 Financial reports of extrabudgetary units
A
Notes:
Financial reports of all extrabudgetary activities, containing full information on revenue, expenditure, financial and tangible assets, liabilities, guarantees, and long-term obligations - supported by a reconciled cash flow statement - are submitted to the SNG annually within one month of the end of the FYs.
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:
Information on the activities to be performed under the policies orprograms of all service delivery units is published annually. 69.37% o expenditures of service delivery units have a framework of PIs relating to outputs or outcomes.
PI-8.2 Performance achieved for service delivery
C
Notes:
All of the 13 largest service delivery departments published the performance achieved in FY 2018 on their websites. Information on the activities performed covered 91.87% of total service delivery expenditure in FY 2018.
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 the source of funds.
PI-8.4 Performance evaluation for service delivery
D
Notes:
Independent evaluations of the efficiency or effectiveness of service delivery were carried out for less than 10 percent of the expenditures of the service delivery units in 2017. But no evaluation report was published.
PI-9 Public access to fiscal information
D
Notes:
PI-9.1 Public access to fiscal information
D
Notes:
The Rucheng Government made available to the public two 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
C
Notes:
PI-10.1 Monitoring of public corporations
D
Notes:
Three out of the ten largest PCs in Rucheng submitted financial reports to the controlling entities within three months after the FY.
PI-10.2 Monitoring of subnational governments
NA
Notes:
There are no SNGs within Rucheng.
PI-10.3 Contingent liabilities and other fiscal risks
B
Notes:
There are no state insurance schemes and guarantees in Rucheng. 2 out of 8 operating PPP projects active in FY 2018 incurred ssignificant contingent liabilities.
PI-11 Public investment management
D+
Notes:
PI-11.1 Economic analysis of investment proposals
C
Notes:
Economic analyses are conducted according to national guidelines to assess all major investment projects, are reviewed by a third party (DRB); but they are not published.
PI-11.2 Investment project selection
C
Notes:
The DRB is responsible for selecting projects and making proposals to the County Committee. But no clear criteria are applied during project selection.
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
D
Notes:
The total costs and physical progress of part of the major investment projects are monitored monthly throughout project duration by the Rucheng DRB.
PI-12 Public asset management
C
Notes:
PI-12.1 Financial asset monitoring
C
Notes:
The Rucheng Government maintains records of its holdings in all major categories of financial assets (including cash, term deposits, account receivables, leases, equity).
PI-12.2 Nonfinancial asset monitoring
C
Notes:
The Rucheng Government maintains a register of its holdings of fixed assets, including information on their usage and age. Registers of land and mineral resources are also maintained.
PI-12.3 Transparency of asset disposal
C
Notes:
Procedures and rules for the disposal of financial and non-financial assets are established. Partial information on asset disposal is included in the state-owned assets management report.
Notes:
PI-13.1 Recording and reporting of debt and guarantees
C
Notes:
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.
PI-13.2 Approval of debt and guarantees
A
Notes:
The Rucheng Finance Bureau 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 Rucheng People’s Congress.
PI-13.3 Debt management strategy
D
Notes:
There is no mid-term DMS indicating risk indicators such as interest rates, exchange rates or refinancing alternatives.
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, and some key demographic and macroeconomic indicators, but the referred data are not submitted to the legislature.
PI-14new.2 Fiscal impact of policy proposals
D
Notes:
No estimates about the fiscal impacts of policy changes have been conducted.
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 generally adhered to. Date of issuance of the FY 2019 budget circular was October, 18 2018.
PI-17.2 Guidance on budget preparation
B
Notes:
The budget circular covers total budget expenditure for the full FY.The approved expenditure ceilings were provided on November 20,2018, after the circular’s distribution to the budgetary units, but before budgetary units completed their submission on November 30, 2018.
PI-17.3 Budget submission to the subnational council
D
Notes:
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.
PI-18 Legislative scrutiny of budgets
C+
Notes:
PI-18.1 Scope of budget scrutiny
B
Notes:
Budget scrutiny by the Rucheng People’s Congress covers details of expenditure and revenue and fiscal policies, but not medium-term fiscalforecasts and medium-term priorities.
PI-18.2 Legislative procedures for budget scrutiny
B
Notes:
The Budget Law of PRC and the Interim Methods for Budget Examinationand Supervision of the Standing Committee of the Rucheng County People's Congress stipulate the legislative procedures for budget scrutiny.
PI-18.3 Timing of budget approval
B
Notes:
In two of the last three FYs, the county legislature approved the annual budget proposal before the start of the FY. The delay in the third year did not exceed one month.
PI-18.4 Rules for budget adjustments by the executive
C
Notes:
Clear rules about budget adjustments exist and were adhered to in the majority of 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 Treasury Office of the Finance Bureau obtains revenue data from the departments responsible for collecting fiscal revenue (the TaxationBureau 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.
PI-20.2 Transfer of revenue collections
A
Notes:
All tax revenues are transferred to the Rucheng County Treasury on a daily basis, while non-tax revenues are paid directly into the special accounts under the TSA system.
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 to Rucheng County.
PI-21 Predictability of in-year resource allocation
D+
Notes:
PI-21.1 Consolidation of cash balances
C
Notes:
The Rucheng Finance Bureau obtains a daily balance report from the Treasury, while the balances of special accounts are consolidated monthly.
PI-21.2 Cash forecasting and monitoring
D
Notes:
The Rucheng Finance Bureau has not conducted cashflow forecasting and monitoring.
PI-21.3 Information on commitment ceilings
D
Notes:
Payment can be made within the approved budget, but expenditure commitment ceilings for budgetary units are not effectively applied.
PI-21.4 Significance of in-year budget adjustments
C
Notes:
Significant in-year budget adjustments are frequent. They are partially transparent.
PI-22 Expenditure arrears
D
Notes:
PI-22.1 Stock of expenditure arrears
D*
Notes:
Since Rucheng County has not set up a monitoring system for expenditure arrears, data on the stock of arrears for FYs 2016-2018 are not available.
PI-22.2 Expenditure arrears monitoring
D
Notes:
There is no monitoring system for expenditure arrears in Rucheng county.
Notes:
PI-23.1 Integration of payroll and personnel records
A
Notes:
The approved employee list, personnel database, and payroll are linked to each other through the documents approved.
PI-23.2 Management of payroll changes
C
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 Centre.
PI-23.3 Internal control of payroll
A
Notes:
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 the integrity of data.
Notes:
Payroll audits were undertaken partially within 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 feasibleto 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 every criterion.
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:
Most (more than 75% but less than 90%) the payments are in line with regular payment procedures, and all exceptions are authorized in advance.
Notes:
PI-26.1 Coverage of internal audit
C
Notes:
Internal audit is operational for budgetary units representing all of the budget revenues and the majority of budget expenditures.
PI-26.2 Nature of audits and standards applied
B
Notes:
Internal audit activities are focused on verifying the adequacy and effectiveness of internal control.
PI-26.3 Implementation of internal audits and reporting
C
Notes:
The two sampled budgetary units have completed the majority of their annual audit plans, as evidence by the distribution of their reports to the appropriate parties.
PI-26.4 Response to internal audits
A
Notes:
Management of two sampled departments proactively responded to the auditors’ suggestions disclosed in the audit reports within 12 months after the audit reports were issued.
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 active government bank accounts is completed within 5 days after the end of each month.
PI-27.2 Suspense accounts
NA
Notes:
There is no suspense account in Rucheng County.
PI-27.3 Advance accounts
NA
Notes:
There is no advance account in Rucheng County.
PI-27.4 Financial data integrity processes
B
Notes:
Access and changes to the financial records are restricted. The network passed the Grade III of the Computer Information System Security Protection Certification, which means an audit trail is in place.
PI-28 In-year budget reports
B+
Notes:
PI-28.1 Coverage and comparability of reports
A
Notes:
There are monthly reports and analyses on budget execution. Coverage and classification of data allow for direct comparison to the original budget.
PI-28.2 Timing of in-year budget reports
A
Notes:
There are monthly budget execution reports released within ten days of the end of the reported period.
PI-28.3 Accuracy of in-year budget reports
B
Notes:
The in-year budget report data are largely consistent and useful for the analysis of budget execution.
PI-29 Annual financial reports
D+
Notes:
PI-29.1 Completeness of annual financial reports
C
Notes:
An annual budget execution report is prepared and is comparable with the approved budget.
PI-29.2 Submission of reports for external audit
B
Notes:
Budget execution reports are submitted to the County Audit Office within 6 months of the end of the FY.
PI-29.3 Accounting standards
D
Notes:
The budget execution reports are prepared in line with the national standards stipulated by MOF.
VII. EXTERNAL SCRUTINY AND AUDIT
Scores by Dimension
Overall Indicator Score
Notes:
Notes:
In the past three FYs, the expenditures audited by external auditors accounted for less than 50% of total expenditure.
PI-30.2 Submission of audit reports to the subnational council
C
Notes:
During the past three FYs, the Audit Office submitted the audit reports to the legislature within nine months after receiving the financial reports.
PI-30.3 External audit follow-up
A
Notes:
The rectification reports show that in the last three FYs, required followup actions were taken by the related entities effectively and timely in response to the issues disclosed by the auditors.
PI-30.4 Independence of the public audit institution in charge of subnational governments
B
Notes:
The Audit Office operates independently from the executive with respect to procedures for the appointment and removal of the head of the institution, the planning of audit engagements, and the execution of the institution’s budget.
PI-31 Legislative scrutiny of audit reports
B
Notes:
PI-31.1 Timing of audit report scrutiny
A
Notes:
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.
PI-31.2 Hearings on audit findings
C
Notes:
An in-depth hearing takes place on the main findings of the audit report once every year.
PI-31.3 Recommendations on audit by subnational council
A
Notes:
For three consecutive years, once receiving the follow-up reports from auditees, a summarized report was prepared by the Audit Office and submitted to the Standing Committee.
PI-31.4 Transparency of legislative scrutiny of audit reports
D
Notes:
The hearing 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.