Upload
martha-baldwin
View
216
Download
0
Tags:
Embed Size (px)
Citation preview
1
AN INTRODUCTION TO THE DEPARTMENT BUDGET
MANAGEMENT REFORM OF CENTRAL GOVERNMENT
Guifeng LIN Deputy Director-General, Department of Bu
dget, Ministry of Finance, PRCApril 27th , 2005
2
CONTENTS
I. Background to Department Budget Reform
II. Main Content of Department Budget Reform
III. Achievements of Department Budget Reform
IV. Considerations on Department Budget Reform in the future
3
I. Background to Department Budget Reform
since 1979: The adjustment of public finance functions that aims to establish Chinese public finance framework in accordance with market economy
1994: built the taxation division system; while public finance expenditure with low efficiency
National Audit Office and Standing Committee of National People Congress suggested improving central budget report and department budget in 1999
Reform of central department budget since FY2000
4
II. Main Content of Department Budget Reform
2.1 Concepts and framework
2.2 Contents of reform
5
2.1Concepts and framework
Department budget consists of budget planning, reporting ,auditing and collecting of central department in accordance with budgeting regulations
6
2.1Concepts and framework
Content: including all revenues and expenditures in each department;
Type: according to different functions and objectives;
Process: collecting all separate budget
7
2.1Concepts and framework
Accuracy: broken into separate unit and project
Validity: budgeting under the authority of Ministry of Finance in accordance with laws and regulations
8
Framework departmentBudgetdepartmentBudget
General BudgetGeneral Budget Fund BudgetFund Budget
Revenue BudgetRevenue BudgetExpenditure BudgetExpenditure Budget Expenditure BudgetExpenditure BudgetRevenue Budget Revenue Budget
Chart 1 -1
Budget
appropriation B
udget appropriation
Revenue off budget
Revenue off budget
Other R
evenueO
ther Revenue
Basic E
xpenditureB
asic Expenditure
Project E
xpenditureP
roject Expenditure
9
2.2 Main contents of reform1 、 Reform : one budget for one department
department budget comprises all the revenues and expenditures in one department according to unified regulations with the same format. Achieved initial objectives for concise and complete budget for every department.
10
2.2 Contents of reform
2 、 Divided the expenditure budget into basic expenditure and project expenditure.
11
Basic Budget is a branch of department expenditure budget. It includes basic annual expenditures to facilitate daily operation in public institution including expenditures on staff and administration commodities.
Basic Expenditure Budget
Administration quotaAdministration quotaStaff quotaStaff quota
Basic quotaBasic quota
12
Basic Budget
Expenses on social security Expenses on social security
pensionpension
Base payBase pay
Allowances and bonusAllowances and bonus
StipendStipend
Fee for serviceFee for service
Lodging subsidy Lodging subsidy
Base PayBase Pay
AllowancesAllowances
BonusBonus
Expenses on social securityExpenses on social security
Termination payTermination pay
Retirement Pension Retirement Pension
Severance pay Severance pay
Other expensesOther expenses
subsidysubsidy
Other staff expenseOther staff expense
StipendStipend
Fee for serviceFee for service
Lodging subsidiesLodging subsidies
Staff Q
uota
Staff Q
uota
Exp
end
iture item
s of bu
dget
classificationE
xpen
ditu
re items of b
ud
get classification
Other staff allowancesOther staff allowances
13
Basic BudgetExpenses on administration
and printingExpenses on administration
and printingAdministrationAdministration
PrintingPrinting
Water and electricityWater and electricity
trainingtraining
hosthost
Expenses on conferenceExpenses on conference
Ad
min
istration Q
uota
Ad
min
istration Q
uota
Exp
end
iture item
s of bu
dget classification
Exp
end
iture item
s of bu
dget classification
Water and electricityWater and electricity
Special equipmentSpecial equipment
VehiclesVehicles
Special materialsSpecial materials
Office equipmentOffice equipment
BooksBooks
Expenses on conferenceExpenses on conference
LaborLabor
Employment subsidyEmployment subsidy
Other public expensesOther public expenses
Other ExpendituresOther Expenditures
Purchase of special material
Purchase of special material
14
Project budget is an annual expenditure beyond basic budget. It realizes the objective of administrative management and public affairs.
Based on database management, project budget prioritizes the tasks of central government according to expenditure plan in public administration in order to establish the mechanism of rolling management .
Project Budget
Public Administration
Public AdministrationInfrastructureInfrastructure
ProjectProject
OtherOther
15
We regularly manage project database according to unification, classification and prioritization.
Unification refers to design, plan and make declaration documents with one principle.
Classification refers to manage database under respective authority.
Prioritization refers to manage database according to the degree of urgency.
Rolling management refers to transfer the continued project from budget this year to next year.
Project Budget
16
2.2 Main contents of the reform3 、 Promoted the reform of revenue and expenditure with comprehensive orientation.
Unified the budget management mode and canceled those outdated transition policies. Department budget must include all the other revenues besides government revenue. All charges in public administration should be transmitted to Treasury or special account.
17
2.2 Main contents of the reform
4 、 Standardized budget procedure between the Ministry of Finance and central department. The overall budget procedure includes four phases as follows.
18
Flow Chart
Grass-roots Unit
Department
MOFPeople’s Congress
Report Collect & Adjust
Examine
Allocation
Report Collect & Adjust
Allocation
Collect & Report
Examin
e
approve authorize
authorize
Report1
Authorize1
Report2
Authorize2
19
2.2 Main contents of the reform
5 、 Promoted the transition of performance from “allocation oriented” to “management oriented”
20
III 、 Results of departmentBudget Reform 3.1 Established primary budget allocation mech
anism in accordance with macroeconomic policies and departmentfunctions.
3.2 Strengthened budget constrain, implementation and validity.
3.3 Changed the time and modes of budget then increased accuracy on budget.
3.4 Confirmed the subject of budget 3.5 Increased transparency and intensified supe
rvision
21
3.1 Established primary budget allocation mechanism in accordance with macroeconomic policies and departmental functions.
Ministry of Finance collect unit budget and report according to policies in macro economy and programs in social development. All departments should systematically allocate the budget in accordance with budget structure and plan. First, key projects; Second special projects; Third, other projects.
22
3.2 Strengthened budget constrain, implementation and validity.
Divided all expenditures into basic
expenditures and project expenditures. Implement standardized budget management. Reduced backup budget and time lag in implementation and increase the ratio of allocated budget.
23
3.3 Changed the time and modes of budget then increased accuracy on budget.
Budget time is extended from 3 months in 1999 to 7 months in 2004. Central budget is collected from basic units and all expenditure items are related with the relevant units.
24
3.4 Conformed the subject of budget
Basic units should make budget by themselves under the basic expenditure guide line proposed by MOF. It is practical and self controlled.
25
3.5 Increased transparency and intensified supervision
Department budget proposal to NPC increased from 26 in 2001 to 34 in 2004. Budgets to NPC is specified and some important expenditure planning including education, science & technology and social security are also proposed to NPC.
26
IV. Further Reform of department Budget in the future
4.1 To promote the reform of basic budget and the quota management system
4.2 To improve project budget modes to fulfill rolling management gradually
4.3 To raise the public finance efficiency by regular examination of performance
4.4 To promote the reform of separation between off budget revenues and expenditures to carry out comprehensive budget
4.5 To standardize budget management procedure to strengthen budget constrain and budget supervision
27
4.1 To promote the reform of basic budget and the quota management system
Intensify data collection and verification
Combine assets quota and allocation quota
28
4.2 To improve project budget modes to fulfill rolling management gradually
To introduce new regulations and quantitative methods
To improve management of project database To adjust project expenditure according to
medium-and-long-term plan and establish the mechanism of rolling management
29
4.3 To raise the public finance efficiency by regular examination of performance
To introduce the concept of performance into budget management according to the reform of public finance. Establish the examination of performance to improve the efficiency of fiscal management.
30
4.4 To promote the reform of separation between off budget revenues and expenditures to carry out comprehensive budget
To improve the off budget management
To promote the reform of separation between off budget revenues and expenditures and include all off budget funds in accordance with budget plan.
31
4.5 To standardize budget management procedure to strengthen budget constrain and budget supervision
Standardized budget procedure as follows:
To standardize the mechanism of internal and external budget management
To standardize the reports and examination system of the State Council , auditing departments and fiscal department
To standardize the mechanism of authorization and supervision of the People’s Congress and the State Council
32
4.5 To standardize budget management procedure to strengthen budget constrain and budget supervision
Establish the mechanism of standardized budget procedure:
To standardize budget procedure includes budget plan, budget implementation and adjustment and budget approval. They constitute a overall system of budget management.
33
Thank you very much!