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China: New Audit Regulation to Deter Corruption
Source: E-mail China Daily
Source Date: Friday, December 10, 2010
Focus: Institution and HR Management
Country: China
Created: Dec 13, 2010

Provincial level officials and ministers will be held more fiscally responsible under an expanded auditing system, the country's top auditor said on Thursday.

"The regulation will be significant in supervising officials' power use and corruption prevention," Liu Jiayi, head of the National Audit Office, was quoted as saying in an interview posted on the office's website.

Under the regulation, released by the general offices of the Communist Party of China (CPC) Central Committee and the State Council, leaders of public institutions and State-owned enterprises will also be audited.

China introduced the first such regulation in 1999, but it only included measures to audit financial records of county-level and below Party and government officials.

The audit target was extended to provincial governors and ministers in 2000 on a trial basis and to heads of provincial government departments in 2005.

Chinese auditors have uncovered more than 68.4 billion yuan ($10.2 billion) in illegal use of funds during nationwide audits of some 410,000 Party and government officials and bosses of State-owned enterprises since 1998, according to Liu.

During the audit of provincial governors and ministers, their implementation of economic policies, handling of income and expenses, key fund management and project construction will be examined.

"They have power and control many resources, and how they fulfill their economic accountability will impact local economic and social development," he said.

More importantly, the audit can be carried out frequently, so illegal activities can be cleared up before they spread, he said.

Liu also said the audit will be made during an official's tenure to solve any problems that exist.

Results of the audit will be recorded in an official's file and it will be an important factor in performance assessments, promotions or removal, and rewards or punishments.

The audit group will consist of officials from local discipline inspection commissions and sectors including audit, supervision, organization, human resources and State asset supervision and management.

"It's a big step in cracking down on corruption. And the regulation will deter officials who want to abuse their power," said Liu Xutao, a professor at the Beijing-based Chinese Academy of Governance.
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