Article 1    These Provisions are formulated in accordance with the Audit Law of the People's Republic of China (hereinafter referred to as the Audit Law) and the Program for Functional Disposition and Establishment of Internal Organizations and Staffing of the CNAO for the purpose of establishing and perfecting management systems for audit offices dispatched to departments of the State Council by the CNAO and reinforce the management thereof.

Article 2    The term "audit offices dispatched to departments of the State Council by the CNAO" mentioned herein refers to the audit offices dispatched by the CNAO to ministries, commissions and administrations of the State Council (hereinafter referred to as audit offices dispatched to departments).

Article 3    The CNAO may establish its dispatched audit offices in relevant departments and units of the State Council according to its working requirements and with due approval from the State Council.  Audit offices dispatched to departments shall conduct their audit according to the law and authorization from the CNAO.

Article 4    Audit offices dispatched to departments shall practice the management system of dual leadership by the CNAO and their accommodating departments with the leadership of the CNAO as its essence.   The specific stipulations of the above-mentioned management system are as follows:
(1) Organizational establishment, staffing scale and the number of leading positions of the audit offices dispatched to departments shall be determined by the CNAO while establishment of the internal divisions and sections of such audit offices shall be submitted to the CNAO for review and approval;
(2) Audit offices dispatched to departments shall conduct audit according to authorization from the CNAO and report their work to the CNAO.

Article 5    Funds required by audit offices dispatched to departments for their performance of duties and responsibilities shall be allocated to their accommodating departments by the CNAO through the Ministry of Personnel, the Ministry of Finance and the Administration for Managing  Departments of the State Council while office facilities and logistics shall be taken care of by their accommodating departments.

Article 6    Major responsibilities of audit offices dispatched to departments shall include the following items:
(1) Implementation of audit regulations formulated and audit decisions made by the CNAO;
(2) Auditing revenues and expenditures and value for money of the enterprises and undertakings within the audit jurisdiction determined by the CNAO;
(3) With regard to particular issues which are related to revenues and expenditures and are concerned with inter-sector management of the accommodating departments, audit offices dispatched to departments shall conduct special audit investigations into or organize the concerned internal audit organizations to carry out inter-sector audit for the purpose of producing opinions and recommendations related to inter-sector management of the above mentioned departments;
(4) Timely submitting reports to the CNAO on material problems related to relevant audit guidelines and policies as well as new phenomenon and new issues emerging in the course of  reform;
(5) Taking charge of the internal audit of enterprises and undertakings directly subordinate to the concerned accommodating departments as well as instructing and supervising internal audit of the same sector;
(6) Formulation of regulations and systems on professional aspects of audit within the departmental system according to the Audit Law and other relevant laws and regulations as well as reporting such regulations and systems to competent leaders of the departments for approval and implementation after review and approval thereof are obtained from the CNAO;
(7) Carrying out assignments from the CNAO and the departmental leaders.

Article 7    Audit offices dispatched to departments shall perform their work in accordance with the following procedures:
(1) Preparation of annual audit plans and implement them after approval by the CNAO;
(2) Performance of audit according to stipulations of the Audit Law with audit opinions and audit decisions produced thereby reported to the CNAO for filing;
(3) Where the audited bodies disagree with the audit decisions made by audit offices dispatched to departments and thereby appeal for review, the CNAO shall take charge of assignments from the CNAO with its professional audit departments carrying out  the specific reviewing procedures while the audit offices dispatched to departments shall take charge of assignments from their accommodating departments according to relevant stipulations ;
(4) Timely submitting, as required by relevant stipulations, to the CNAO annual work plans, various statements stipulated by the statistical systems, half-yearly and yearly summaries of audit work, reports on relevant audit assignments as well as other documents and materials such as information, bulletins and trend of development concerning audit work.

Article 8    Management of the officials of the audit offices dispatched to departments shall be conducted according to relevant stipulations formulated by the Organization Department of the CPC Central Committee and the Ministry of Personnel.  Mandate of such management shall be implemented according to the following stipulations:
(1) Appointment and removal of director generals shall be made by the CNAO while the shifting and exchange of director generals shall be taken charge of jointly by the CNAO and the accommodating departments;
(2) Officials at and below the rank of division directors shall be managed by the accommodating departments;
(3) Election and management of candidates for various leading positions shall be taken charge of jointly by the CNAO and the accommodating departments;
(4) Daily managerial tasks concerning political affiliations, rewards and punishments, welfare, salary adjustments and official records of the officials shall be taken care of by the accommodating departments and shall be implemented according to the Interim Regulations on Management of Civil Servants.

Article 9    Appointment and removal of officials of the audit offices dispatched to departments shall be made according to the following procedures:
(1) With regard to appointment and removal of director generals, the CNAO or the accommodating departments shall nominate the candidates who shall thereafter be tested jointly by the CNAO and the accommodating departments;
(2) Where the Party committees of the accommodating departments suggests the appointment or removal of certain director generals, such suggestions shall be submitted to the Organization Department of the CPC Central Committee for filing, review and approval after affirmative decisions thereof are made by the Party committee of the CNAO.  In cases of appointments, documents related to recent tests of the candidates and the Submission Form for Appointment and Removal of Officials shall be submitted while in cases of removals only the Submission Form for Appointment and Removal of Officials shall be submitted;
(3) The CNAO is  responsible for issuing notifications concerning appointment and removal of director generals with relevant copies thereof sent to the concerned accommodating departments.  Before director generals undergo necessary procedures related to their appointment or removal, competent leaders of the CNAO or of the accommodating departments shall  talk to the concerned individuals;
(4) The accommodating departments shall be responsible for the appointment and removal of division directors, issuance of the notifications of appointing and removing division directors and send relevant copies thereof to the CNAO;
(5) Managing mandates and procedures of appointment and removal of non-administrative positions shall be implemented according to those of administrative positions.

Article 10    Benchmarking of the officials of the audit offices dispatched to departments shall be conducted according to the following requirements:
(1) Political quality, professional proficiency and benchmarking grades of the officials shall be determined according to the standards required of civil servants which are expressed as integrity, capability, diligence and achievement with priorities placed on political records and working performance;
(2) At the time of staffing adjustment, director generals shall be benchmarked jointly by the CNAO and the accommodating departments while appointment or promotion benchmarking of officials at or below the rank of division directors shall be taken charge of by the accommodating departments;
(3) Daily and annual benchmarking of officials shall be taken care of by the accommodating departments;
(4) Results of benchmarking shall be regarded as the basis for appointment and removal, rewards and punishments and adjustment of leading positions.

Article 11    Retirement of officials of the audit offices dispatched to departments shall be handled according to the following stipulations:
(1) When officials reach the statutory age of retirement, relevant state systems concerning such retirement shall be implemented.  The CNAO shall remove the concerned director generals from their offices while the accommodating departments shall carry out relevant retirement procedures;
(2) Where director generals exceeding the statutory age of retirement need to remain in office due to working requirements, such requirements shall be agreed to by the CNAO and the accommodating departments through negotiation and shall thereafter be reported to the Organization Department of the CPC Central Committee for approval;
(3) The accommodating departments shall take charge of the retirement of officials at or below the rank of division directors;
(4) Political arrangements and retirement benefits of the retired officials shall be implemented according to relevant stipulations of the audit offices dispatched to departments.

Article 12    Auditors of the audit offices dispatched to departments shall fulfill their audit assignments according to the law, abide by various stipulations about the construction of clean and honest governments and other working disciplines laid down by the State Council and the CNAO and observe the Professional Codes of Ethic for Auditors of Audit Institutions.

Article 13    The authority to interpret these Provisions rests with the CNAO.

Article 14    These Provisions shall come into effect as of January 1, 1997.  The  Circular on the Several Issues Concerning Dispatching Audit Offices by the CNAO to Departments of the State Council which were promulgated on February 16, 1994 and the Practice Directions for Managing Audit Offices Dispatched by the CNAO to Departments of the State Council which were promulgated on January 23, 1995 shall be abolished as of the same date.