Audit-based Oversight Ensures Proper Implementation of Central Policies and Major Projects
Updated: 2022-03-08    Soure:International Cooperation Department

On January 6, 2022, the National Audit Work Conference was held in Beijing. Hou Kai, Auditor General of the National Audit Office of China (CNAO), said at the conference that over the past year, audit institutions closely followed the priorities of the CPC and the state with the focus on the authenticity, lawfulness and effectiveness of financial revenue and expenditure, to ensure the proper implementation of central policies and major projects and safeguard national economic security.

From January to November 2021, audit institutions nationwide audited more than 61,000 entities and helped increase revenues, cut expenditures and recover losses totaling over 304 billion yuan, and facilitated the changes of more than 9,900 items of rules and regulations.

CNAO audited the implementation of major policies and investment projects to ensure their sound execution. It audited policy implementation of the five areas prioritized by the 2020 Central Economic Work Conference, namely macro-economy, industrial development, micro-economy, reform and social governance, and disclosed fraudulent claims for public funds, overstated expenditures, failure in accessing preferential taxes and fee policies, excessive collection of taxes and fees, irregular loans for real estate speculation (hindering the policy that housing is for living in not for speculation) , and irregularities of financial institutions that increased MSEs’ financing costs. CNAO and provincial audit institutions audited more than 100 major investment projects and revealed problems including slow progress, budget overestimation, inflated expenditure, late payments for construction, and ecological damages in some projects.

To facilitate the improvement of people’s well-being, audit institutions stepped up their efforts in delivering services to the people. CNAO organized audit institutions nationwide to conduct over 200 audits concerning people’s well-being, including employment, elderly care, medical care, housing, education, poverty alleviation and rural revitalization, with a special focus on the final step of fund use. Problems that affected people’s immediate interests were revealed, such as stagnated allocation or withholding of funds, incomplete coverage of basic insurance schemes, favoritism, and losses or waste, totaling over 40 billion yuan. More than 300 cases of major violations were handed over to competent authorities.

To uphold financial and economic disciplines, audit institutions revealed falsification of financial data, and dealt with fiscal revenue inflation, profit misstatement, fake transactions to cover up nonperforming loans, and year-end budget flush which usually implies overstated expenditures. Watching closely the implementation of central Party leadership’s eight-point decision on conduct and requirements for austerity, they disclosed cases of misused fiscal funds for government buildings in some heavily indebted localities dating back to 2015.

Regarding audit priorities in 2022, Hou Kai stressed that CNAO will uphold the principle that economic oversight stands first in auditing, focus on main responsibilities without overstepping statutory authority, and take decisive and well-considered steps, to make new contributions by leveraging the role of auditing in the macro-control policy toolbox.

According to the conference, audits of public finances and the financial sector will be conducted in 2022 based on macro policy requirements. While ensuring regular audits of central financial management, departmental budget implementation and financial institutions, audit institutions will give priority to scrutinizing budgetary expenditures, the implementation of key policy measures on tax and fee cuts, how Party and government institutions practice fiscal frugality, the tightening of financial and economic disciplines, financial institutions’ support for the real economy, especially for small and micro enterprises, scientific and technological innovation, and green development initiatives.

Meanwhile, CNAO will carry out various audits with a focus on forestalling and defusing major risks, which will be given even greater priority to. When examining local government debt management, credit fund placement, non-performing asset disposal, authenticity of accounting information, and development and utilization of energy and resource, the primary task is to reveal prominent risks including major economic corruption, financial fraud, fiscal fraudulence, accounting information distortion, and ecological damage. Audit institutions will strive to reflect tendencies, common problems and typical cases affecting economic security in a timely manner, report malicious economic activities, and solve problems at the source to make auditing more preventive.

CNAO will also conduct audits concerning people’s well-being in 2022 to meet social policy requirements. It will organize audit institutions across the country to carry out audits of employment subsidies and unemployment insurance, medical insurance funds and reform efforts in integrating medical treatment, medical insurance and medicines supply, and funds related to housing and rental housing, as well as the implementation of the rural revitalization strategy and high-quality farmland development. Efforts will be made to follow up till the final step of projects and funds concerning people’s well-being, to watch closely and facilitate their proper use in the interests of the people.

In addition, CNAO will carry out audits to meet relevant policy requirements such as micro-economic control, structural reform, science and technology, reform and opening up, and also perform economic accountability audits and tenure-based natural resources accountability audits with a focus on regulating the exercise of power and urging officials to take on responsibility.

Hou Kai confirmed that in 2022, CNAO will focus on the authenticity, lawfulness and effectiveness of revenue and expenditure, and perform regular economic health checks, in order to facilitate both COVID-19 response and economic and social development in a coordinated way, ensure stability on the six fronts and security in the six areas, and give better play to the role of auditing in the Party and state oversight system.