Notice of Shanghai Municipal People’s Government on

Printing and Distributing the Opinions on Further

Intensifying Audit Rectification Work

(December 5, 2009)

SMPG G [2009] No. 61

Attention: all District and County People’s Governments, and all relevant Commissions, Offices and Bureaus (Administrations) of the Municipal People’s Government:

We hereby print and distribute the Opinions on Further Intensifying Audit Rectification Work to you, and request you to implement them conscientiously.

Opinions on Further Intensifying Audit Rectification Work

With a view to continuously strengthening the fiscal and financial administration, constantly intensifying the rectification of the problems found in audits and perfecting and improving the long-acting mechanism and the coordinated mechanism for audit rectification, and in accordance with the Audit Law, other laws and regulations and the requirements set by the Municipal People’s Government, we hereby put forward the following opinions on further intensifying audit rectification work:

I. To earnestly raise the understanding of the importance of audit rectification work

Intensifying the audit rectification work is an urgent need for strictly implementing the Budget Law, the Audit Law, and other laws and regulations, an important measure for strictly enforcing fiscal disciplines and also a necessary requirement for promoting the building of the Party style and clean government and for strengthening the fight against corruption. All districts/county, all departments and units shall further understand the importance and necessity of intensifying audit rectification work to the full, earnestly raise their conscientiousness and initiative in carrying out audit rectification, strictly implement audit decisions, seriously accept audit proposals and earnestly rectify the problems found in audits.

II. To perfect and improve “Six Systems” and intensify the audit rectification work in real earnest

Doing well in the audit rectification work needs a series of effective systems as guarantee. All districts/county, all departments and units shall, during the audit rectification work, perfect and improve “Six Systems”, so as to ensure the full implementation of such work.

1. To perfect and improve the audit rectification report system. An auditing organ shall annually report audit results on the budget implementation and other fiscal revenues and expenditures to the government at the same level, and, with authorization of the government, report such audit results to the standing committee of the people’s congress at the same level. The government at each level shall, based on the deliberation statement made by the standing committee of the people’s congress, organize related departments to study how to carry out the rectification work. The audited departments and units shall submit to the auditing organ a plan for the audit rectification and a report on the result of the audit rectification respectively within 30 days and 90 days from the day the audit report and audit decision go into effect. The report on the audit rectification shall include such matters as the execution of the audit decision on handling and punishment, the self-rectification according to the audit requirement, the acceptance of the audit proposals, the liability investigation and handling of related departments and persons liable, the reasons for the delayed rectification and the plan for the rectification and handling within the time limit. The auditing organ shall annually report the audit rectification result to the government at the same level, and shall, with authorization of the government, report the audit rectification work to the standing committee of the people’s congress at the same level. Such report shall include the basic state of the annual audit rectification work, main matters rectified, remaining problems and recommendations on intensifying the audit rectification work.

2. To perfect and improve the supervision and check system for the audit rectification work. The governments at all levels shall annually discuss and arrange the rectification work for the problems found in the audit of the budget implementation and other fiscal revenues and expenditures at their routine meetings. The implementation of the audit rectification work, and, the  implementation of the directives of leading officials of the government at the same level on the synthesized report of the audit, on the report of a special audit (investigation), the report of economic liability audit results, the audit report (information) and on other related audit matters shall be incorporated into the matters under supervision and check by the government at the same level to be supervised and checked in time by the supervision organ of the government at the same level. Particular stress shall be given on the supervision and check of the departments and units that seriously violated rules and disciplines, refused to rectify or delayed the rectification in a result of harmful effect and heavy losses and that are found to have made mistakes despite repeated auditing, so as to further promote the audit rectification and earnestly raise the actual effect in supervising and checking the rectification.

3. To perfect and improve the coordinated system for audit rectification. It is necessary to establish a joint meeting for the audit rectification work (hereinafter referred to as the “Joint Meeting”) in which all-level government leaders for the auditing work are a leading jurisdiction, with the participation by the departments of discipline inspection, supervision, organization, personnel, reform and development, public security, finance, audit, State-asset supervision, taxation, industry and commerce, procuratorial organs and other related departments to issue circulars about problems found in audits, study the solution of difficulties encountered in audit rectification and ascertain the responsibility for the rectification. The office for the Joint Meeting shall be set up in the corresponding auditing organ. The Joint Meeting shall practice the principle of division of responsibility and classified supervision. Related departments shall institute and perfect the coordination mechanism for the reference of audited items and shall make the positive performance. The auditing organ shall, on the basis of issuing audit reports and making the audit decisions according to law, be responsible for the induction and comprehensive analysis of the problems found in audits, and shall put forward recommendations to the related departments requesting for assistance in the implementation of the rectification. With regard to a sum of money involved in an unit’s act of fiscal or financial income and expense in violation of the State provisions the appropriation of which the auditing organ requests according to law is to be suspended and in respect to non-tax income such as fines and forfeits that must be collected and turned over to the national treasury, the finance department shall, without delay, withhold or reduce the appropriation and collect and turn over the non-tax income to the treasury or special fiscal account. With regard to a construction project with government investment in whole or in principal that is to be checked, adjusted or stopped as requested by the auditing organ according to law, the development and reform department shall do so without delay. Where the auditing organ, according to law, renders a decision or handling opinion of reference asking the audited unit to pay taxes in arrears, the taxation department shall collect according to law the taxes in full. With regard to the audit opinion made by the auditing organ according to law that the audited unit has done damage to State property, the organ performing the functions as capital contributor shall urge the rectification without delay and mete out punishment according to law. Where the audited unit or relevant person violates Party disciplines or administrative disciplines, the auditing organ shall transfer the case to the discipline inspection department and the supervision department; if the person is suspected of being involved in a crime, the auditing organ shall transfer the case to the judicial organ. Meanwhile, the auditing organ shall timely notify the related organization department that has the jurisdiction over such person. The department concerned shall feed back in writing the handling result on related problems and persons liable to the auditing organ.

4. To perfect and improve the follow-up inspection system for audit rectification. The auditing organ shall, within 90 days after service of an auditing report, auditing decision or reference opinion, supervise and urge the audit rectification, with key points put on the audited unit’s execution of the audit decision of handling and punishment, its self-correction of the matters required by the auditing organ, its acceptance of the audit recommendations and the handling of referred matters. Where the audited organ fails to implement the audit decision or implements it incompletely or not seriously, the reason shall be found out and a written report shall be submitted to the Joint Meeting, which shall study and handle the case. In case of need, the Joint Meeting shall organize related departments to conduct a joint inspection on the audited organ as a key point. The auditing organ shall timely report the follow-up inspection and supervision on the implementation of the auditing results of major audited projects to the government at the same level. The auditing organ and related competent departments shall actively help audited units institute and perfect related rules and systems, normalize financial management, enhance the effective use of funds, and ensure that the problems found in audits are effectively rectified in an all-round way.

5. To perfect and improve the accountability system for audit rectification. The principal person responsible for the audited unit shall be the first person liable in implementing audit rectification work. The principal leader shall be responsible for the rectification of the problems in his or her own department or unit, and shall perform his or her duty to supervise and urge affiliated units to carry out rectification measures for problems existing therein. As for the problems found in the management and operation of enterprises, the enterprises shall make self-rectification on their own, and the regulating departments shall be responsible for the supervision. In respect of a unit that fails to make rectification in compliance with the prescribed time limit or requirements, the member unit of the Joint Meeting shall, according to its functions, investigate the matter and affix the responsibility. As for the department or unit that did not do its best in rectifying the problems found in audits, causing great impact or heavy losses, the departments of discipline inspection, supervision, organization and personnel and the higher competent department shall timely ask the related persons liable to be accountable according to the Interim Provisions on the Implementation of Party and Government Leading Officials Accountability System (CCCPC GO G [2009] No. 25) promulgated by the General Office of CCCPC and the General Office of the State Council, the Regulation on Penalties and Sanctions Against Illegal Fiscal Acts (SC D [2004] No. 427) and related Party and administrative disciplines, laws and regulations. The audited unit that refused or delayed the rectification causing great impact or heavy losses shall be strictly asked to be accountable and a notice of criticism shall be circulated in a certain scope. The audit results shall be one of important bases for the appraisal of the work or operation performance of leading officials, for the appointment and removal of posts and for rewards and punishment. The audit rectification situation shall be included into the appraisal contents for annual work of the related departments and units.

6. To perfect and improve the notification and publication system for audit rectification results. Disclosure of audit results is a breakthrough point for enhancing actual effect of audit rectification and also is an important measure for strengthening audit rectification work. The auditing organ shall intensify the audit publication, each year making public audit results on the budget implementation and other fiscal revenues and expenditure and the audit rectification situation through circulating in the form of document, on the Government Gazette, government Websites and audit Websites, or on the Announcement of Audit Results issued by the auditing organ, so as to urge the rectification by publication. The model for audit rectification work shall be publicized and the department or unit that refuses to make rectification or still makes mistakes despite repeated audits shall be exposed through news media, so as to promote the effective combination of audit supervision with social supervision and the supervision by public opinions and to raise the audit rectification effect.

III. To earnestly intensify the leadership over audit rectification work

The effectiveness of audit rectification work is of vital importance to the strict enforcement of fiscal disciplines and to the normalization and enhancement of the management standard of audited units in their financial affairs. All districts/county, all departments and units shall strengthen the leadership, lay stress on research, carry out audit work according to law, coordinate in their work and make a concerted effort.

1. To strengthen leadership and ascertain responsibility. Leaders of all districts/county and of all departments and units shall attach great importance to the audit rectification work in their thinking and action, earnestly place the rectification of problems found in audits on their important agenda, and ensure that the attitude firm, the responsibility clear, the measures effective, the rectification in place and feedback in time. The principal leader shall attend to the audit rectification work personally, arrange the work without delay, keep abreast of rectification developments, guide and coordinate in supervision of matters related to the audit rectification. The leaders at all levels shall shoulder the responsibility and pay special attention to the implementation at all links, so as to ensure that the rectification work is completed in full.

2. To strengthen research and pay attention to the long-acting effect. All districts/county, all departments and units shall earnestly study the problems found in audits and actively carry out the rectification. As for the problems that can not be rectified at present, rectification plans and concrete measures shall be formulated and the rectification shall be scheduled and completed within the time limit. As for the problems repeatedly found in audits, it is necessary to learn lessons, draw inferences about other problems from one problem and analyze reasons. Special attention shall be given to the building of a long-acting mechanism and essential measures shall be deeply studied to resolve the problems found in audits from their sources, so as to make sure that the powers, affairs and personnel are put under control of rules and systems, to further normalize the acts involving fiscal revenues and expenditures and to enhance constantly the use efficiency of fiscal funds.

3. To carry out audits according to law and supervise and urge the rectification. The auditing organ shall carry out audits according to law, with civility, in strict accordance with the set procedures in a thorough way, and shall ensure clear facts, accurate determination of the nature, appropriate handling and feasible recommendations. The auditing organ shall exchange opinions with audited units in a meticulous and deep-going way and shall ensure its audit opinions and recommendations have clear aims and are practicable. The auditor shall go to the audited unit to track the rectification situation and, if necessary, carry out follow-up audits of related departments and units, and supervise and urge the rectification of relevant problems. The auditing organ shall earnestly study and evaluate the scientificalness and feasibility of rectification measures taken by the audited units and the actual effect of the rectification so as to provide the government with advice for its decision-making.

4. To intensify coordination and make a concerted effort. The role of the Joint Meeting shall be given full play to, the building of a coordinated system for audit rectification shall be strengthened, the communication and coordination shall be further intensified, and the sharing of information, division of work and personal responsibility, performance of respective functions, classified supervision and handling shall be emphasized. The responsibility for audit rectification shall be ascertained conscientiously and efforts shall be pooled to supervise audit rectification, so as to promote the actual effect in audit rectification work.

The rectification concerning the economic responsibility audit for outgoing leading officials shall be carried out according to the Notice of Shanghai Municipal Commission for Discipline Inspection of the CPC, Shanghai Municipal Organization Department of CPC, Shanghai Municipal State-owned Assets Supervision and Administration Commission of CPC, Shanghai Municipal Supervision Bureau and Shanghai Municipal Audit Bureau on Printing and Distributing the Interim Provisions of Shanghai Municipality on the Rectification Work Concerning Economic Responsibility Audit for Outgoing Leading Officials Directly Under the Municipal Jurisdiction (SMOD G [2009] No. 56).