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) for the purpose of determining audit jurisdiction and division of duties among audit institutions.

Article 2    The term "audit jurisdiction" mentioned herein refers to the  division of mandates among audit institutions concerning audit of revenues and expenditures of various departments of the State Council, local people's governments at various levels and their departments, revenues and expenditures of state banking institutions, enterprises and undertakings as well as other revenues and expenditures which should be audited according to the law.

Article 3    Audit institutions and their dispatched audit offices shall conduct audit and audit investigations in accordance with the Audit Law and the audit jurisdiction and division of duties determined by these Provisions.

Article 4    Audit jurisdiction of audit institutions shall be determined according to the financial affiliation of the audited bodies or supervision and management of state assets in the audited bodies.  Specific determination of audit jurisdiction shall be made in accordance with the following stipulations:
(1) Audited bodies which are financially affiliated to the central government shall fall within the audit jurisdiction of the CNAO; audited bodies which are financially affiliated to local people's governments at various levels shall fall within the audit jurisdiction of the local audit institutions at various levels.  Where audit jurisdiction cannot be determined according to financial affiliation, the audited bodies shall fall within the jurisdiction of the CNAO when their state assets are supervised and managed by central government departments or shall fall within the jurisdiction of the local audit institutions at various levels when their state assets are supervised and managed by local government departments;
(2) For audited bodies where state assets dominate or predominate, audit jurisdiction shall be determined by the proportions of shares.  Where shares owned by central government departments equal or exceed those of local government departments, the audited bodies shall fall within the jurisdiction of the CNAO; where shares owned by central governments are less than those of local government departments, the audited bodies shall fall within the jurisdiction of the audit institution of the predominating locality;  
(3) Where state construction projects (including technological renovation projects) practice the system of ownership, audit jurisdiction over such projects should be consistent with that over the owners.  Audit jurisdiction over the owners shall be determined according to Section (1) of this article.  Where the system of ownership is not practiced or the central government and local governments both invest in the construction projects, audit jurisdiction over such projects shall be divided with reference to the previous two sections of this article;
(4) The systems of internal revenues and customs duties as well as final accounts of public finance at the provincial level (including those municipalities which enjoy the status of a province; similarly hereinafter) fall within the audit jurisdiction of the CNAO.  Budgetary implementation at the provincial level shall be audited by the CNAO and the provincial audit institutions;
(5) Audit jurisdiction over economic entities run by state enterprises and undertakings shall be determined with reference to Sections (1) and (2) of this article;
(6) With regard to projects applying loans or assistance from the World Bank, the Asian Development Bank or other international organizations and foreign governments where the central government of China is responsible for both the borrowing and the repayment or which should be audited by the CNAO according to the loan or assistance agreements, the audit jurisdiction over such projects shall fall with the CNAO;
(7) The CNAO shall be responsible for audit of various funds or foundations which belong to local governments but are received, managed and turned over by central government departments on behalf of the local governments; local audit institutions shall be responsible for audit of various funds or foundations which belong to the central governments but are received and managed and turned over by local government departments on behalf of the central government as well as revenues and expenditures generated and incurred by such local government departments.

Article 5    Division of duties among professional audit departments and dispatched audit offices of the CNAO shall be determined in accordance with the principle of matching audit resources with audit tasks, facilitating improvement of audit efficiency and saving audit resources.  The specific division thereof shall be made according to the following stipulations:
(1) Professional departments and dispatched audit offices of the CNAO shall  directly audit or organize audit of primary central budget units such as departments of the State Council and their direct subordinates, agencies, undertakings and parent companies (including group  companies) as well as  organizations crucial to the national economy and people's livelihood such as state enterprises and their key subordinates, state banking institutions, the customs, key construction projects with investment from the central government, armed police force and public finance at the provincial level;
(2) Audit offices dispatched to departments of the State Council by the CNAO shall audit items beyond the stipulations laid down in the previous section of this article such as Beijing-based units subordinate to such departments, small-scale construction projects and technological renovation projects with investments under the fixed quotas;
(3) Resident audit offices dispatched to various localities by the CNAO shall audit other bodies of the central government resident in their respective provinces (or autonomous regions and municipalities directly under the central government) and their neighboring provinces, which are not included in the stipulations laid down in Sections (1) and (2) of this article.

Article 6    Where the CNAO uniformly organizes or authorizes, as required by audit work, its dispatched audit offices and local audit institutions to audit the audited bodies at the central level, the restrictions of pre-determined audit jurisdiction and division of audit duties shall no longer apply.

Article 7     Where necessary, audit institutions at higher levels may directly audit material audit items within the jurisdiction of audit institutions at lower levels while audit institutions at higher levels may authorize audit institutions at lower levels to audit items which fall within the jurisdiction of the former, unless otherwise stipulated by relevant laws and regulations.

Article 8    Units responsible for research and production of military products involving material state secrets shall be audited by professional audit departments of the CNAO.  The Audit Office of the Commission of Science, Technology and Industry for National Defense shall reinforce its audit of such special funds as expenses on experimental production of the results of scientific research for national defense, funds for military high-tech development and special construction funds.  Where necessary, relevant professional audit departments of the CNAO shall directly audit the above units and funds.

Article 9    The CNAO shall determine division of audit duties among its professional audit departments and dispatched audit offices according to these Provisions and in combination with the actual situations of the subjects of audit.

Article 10    Where disputes arise among audit institutions with regard to their audit jurisdiction, the parties in dispute shall negotiate for the settlements thereof. Where the audit institutions fail to settle the disputes through negotiation, they shall refer to their common superior audit institution for settlement.

Article 11    Audit jurisdiction of the military system shall be determined by the Audit Office of the People's Liberation Army of P.R.China and shall report to the CNAO for filing.

Article 12  The authority to interpret these Provisions rests with the CNAO.

Article 13    These Provisions shall come into effect as of January 1, 1997.