National Audit Office
Audit institutions have the powers to:
- require the audited bodies to provide budgets, financial plans, statements
about budget implementation, final accounts, financial reports and other
- review accounting information and assets of the audited bodies;
- investigate relevant units and individuals about issues related to audit
assignments and obtain evidence thereof;
- curb audited bodies' ongoing acts of revenues and expenditures which are
in violation of state laws and regulations;
- announce audit findings to relevant government departments and publish audit findings to the public.
Audit Procedures And Functions
Audit institutions shall form audit teams according to the audit items specified in the audit plans and shall serve audit notifications to the auditees three days prior to the execution of audit. After the completion of audit, audit teams shall submit audit reports to the audit institutions. The latter will examine the audit reports, appraise the audit items and produce their audit opinions. Audit institutions shall make audit decisions or produce audit recommendations to the competent authorities on making out disposition or punishment against relevant irregularities.
Audit institutions at various levels provide professional guidance and supervision over internal audit organizations and carry out quality check on public audit firms.
Government audit institutions in China are comprehensive bodies in charge of controlling public finance and monitoring the economy. The Audit Law stipulates that:
The State Council shall establish audit institution who will take charge of auditing revenues and expenditures of public finance of departments of the State Council and local governments at various levels, revenues and expenditures of state banking institutions, state enterprises and undertakings. The audit institution shall be under the direct leadership of the Premier of the State Council and exercise its power of supervision through auditing independently in accordance with the law and subject to no interference by any administrative organ or public organization or individual.
Peopleâ€™s governments at and above the county level shall establish corresponding audit institutions. Local audit institutions at various levels shall be accountable and report on their work to the peoeleâ€™s governments at the corresponding levels and to audit institutions at the next higher levels.
The Constitution also stipulates that the Auditor General shall be a member of the State Council. The Auditor General shall be nominated by the Premier and, subject to approval by the National People's Congress or its Standing Committee, shall be appointed or removed by the President of the State.
Audit work in China is uniformly managed and audit institution of each level reports to its next higher level audit institution. As the supreme audit institution of China, the CNAO, directly under the leadership of the Premier, organizes and administers audit work of the whole country and reports its work to the State Council. Local audit institutions, under the dual leadership of the administrative heads of their corresponding level governments and the audit institutions at their next higher levels, organize and manage audit work within their jurisdiction. Their audit work should be directed mainly by audit institutions at the next higher levels and reported to their corresponding level governments as well as the next higher level audit institutions.
Duties and Responsibilities
According to the Constitution and the Audit Law, the duties and responsibilities of the audit institutions are:
- auditing budget implementation, final accounts, management and use of
off-budget funds of departments at the corresponding levels and governments at
- auditing assets, liabilities, profits and losses of state-owned monetary
organizations and state-owned enterprises;
- auditing revenues and expenditures of state non-profit undertakings;
- auditing budget implementation and final accounts of state construction
- auditing revenues and expenditures of projects with assistance or loans
provided by international organizations or foreign governments;
- auditing state-owned enterprises which are vital to the national economy
and people's livelihood, receive large entitlements from the government or
suffer substantial losses, as well as other state-owned enterprises designated
by the State Council or corresponding local people's governments;
- auditing special funds such as social security funds and agricultural funds. Every year, audit institutions at various levels shall present a report on the audit of budget implementation and other revenues and expenditures of the public finance to the standing committees of the people's congresses at their corresponding levels on behalf of their corresponding level people's governments.
The CNAO, under the leadership of the Premier of the State Council, takes charge of government audit nationwide. Audit directly conducted by the CNAO covers the following areas:
- implementation of the central budget, other revenues and expenditures of
- revenues and expenditures of central departments, non-profit undertakings
and their subordinate units;
- budget implementation and final accounts of provincial people's
- revenues and expenditures of the Central Bank, assets, liabilities,
profits and losses of central monetary institutions;
- revenues and expenditures Or central government owned enterprises and
enterprises where state assets dominate or predominate;
- revenues and expenditures related to funds managed by relevant departments
of the State Council;
- revenues and expenditures of projects with loans and assistance from international organizations and foreign governments.