Article 1    These Practice Directions are formulated according to the Audit Law of the People's Republic of China for the purpose of standardizing audit of special agriculture funds and ensuring the quality of such audit.

Article 2     The term "special agriculture funds" mentioned herein refers to special agriculture expenditures arranged by the budget, not-on-vote funds, special agriculture loans and funds of agriculture projects applying foreign funds.

Article 3     The term "audit of special agriculture funds " mentioned herein refers to auditing supervision carried out according to the law by audit institutions over the truthfulness, compliance and value for money of the revenues and expenditures of special agriculture funds.

Article 4    By conducting audit of special agriculture funds, audit institutions shall facilitate implementation of state policies on agricultural inputs, promote better management of special agriculture funds by competent authorities, improve effectiveness of fund utilization and ensure sustainable, steady and coordinated development of agriculture.

Article 5    When auditing special agriculture expenditures arranged by the budget, audit institutions shall focus on the following aspects:
(1) Review of and reply to budgets of various government departments for special agriculture expenditures made by financial departments according to annual budgets approved by people's congress at various levels;  adjustment of budgets for special agriculture expenditures in their course of implementation;
(2) Appropriation and payment of funds for special agriculture expenditures for government departments at the corresponding levels made by financial departments in accordance with approved annual budgets, levels and procedures of budgets and actual progress of fund utilization by the user departments; compliance with relevant laws, administrative rules and regulations by the audited bodies at the corresponding levels in their final accounts of special agriculture expenditures;
(3) Appropriation of subsidies for special agriculture expenditures for government departments at lower levels and the settlement of accounts thereof by competent financial departments according to relevant laws, administrative rules and regulations and management systems of public finance;
(4) Compliance with relevant laws, administrative rules and regulations and financial systems by the audited bodies in budgetary implementation and final accounts of special agriculture funds as well as their preparation of plans for fund utilization programs together with the allocation and utilization of such funds;
(5) Paid utilization of funds by financial departments and other competent authorities according to relevant stipulations; regularity, compliance and effectiveness of lending contracts concluded for paid utilization of funds; claim of the above-mentioned funds and charges for usage of such funds according to relevant policies and contracts; distribution of such claims and charges;
(6) Accomplishment of project plans and effectiveness of fund utilization.

Article 6    Audit of special not-on-vote agriculture funds conducted by audit institutions shall cover the following major aspects:
(1) Establishment of special not-on-vote agriculture funds by financial departments and other competent departments according to relevant laws, administrative rules and regulations and stipulations of the Ministry of Finance;
(2) Formation of project plans for fund utilization as well as the allocation and utilization of funds by financial departments and other competent authorities according to relevant laws, administrative rules and regulations and stipulations of the Ministry of Finance;
(3) Paid utilization of funds by financial departments and other competent authorities according to relevant stipulations;  regularity, compliance and effectiveness of lending contracts concluded for funds for paid utilization, claim of the above-mentioned funds and charges for usage of such funds according to relevant policies and contracts; distribution of such claims and charges;
(4) Accomplishment of project plans and effectiveness of fund utilization.

Article 7    Audit of special agriculture loans conducted by audit institutions shall cover the following major aspects:
(1) Issuance of loan plans by the Central Bank according to relevant state policies;
(2) Issuance of loan plans and preparation of plans for loan projects by competent commercial banks according to relevant policies, laws, administrative rules and regulations, loan plans and management systems for special agriculture loans stipulated by the Central Bank;
(3) Proceeding and utilization of loans by competent commercial banks;  regularity, compliance and effectiveness of the concluded loan contracts; claims of loan repayment and collection of loan interests according to loan contracts; continuous utilization of repaid loans according to relevant stipulations;
(4) Implementation of discounting for loans that should be discounted according to relevant stipulations;
(5) Accomplishment of loan plans and effectiveness of loan utilization.

Article 8    Audit institutions at various levels shall conduct audit according to the law of special agriculture expenditures arranged by budgets at the corresponding levels as well as special not-on-vote agriculture funds.

Special agriculture loans shall be audited by the CNAO who may also authorize local audit institutions to conduct such audit according to the law.

Article 9    Audit institutions shall carry out audit or audit investigations according to the law of audited bodies at lower levels concerning the latter's budgetary implementation and final accounts of special agriculture expenditures, allocation and utilization of funds from superior financial departments as subsidies for special agriculture expenditures, material issues effecting the implementation of state agricultural input policy in the course of managing and utilizing special not-on-vote agriculture funds.    

Article 10     While auditing special agriculture funds, audit institutions shall, in addition to audit of departments and units in charge of the management of special agriculture funds, sample audit with pre-determined priorities bodies that utilize special agriculture funds.

Article 11    While auditing special agriculture funds, audit institutions shall plan and manage their audit assignments in accordance with the Provisions of Audit Institutions on Management of Audit Planning, .

Article 12    Audit institutions shall conduct audit in accordance with audit procedures and meter out measures of sanction according to relevant laws and regulations against discovered acts of revenues and expenditures in violation of state stipulations.

Article 13    Audit institutions shall produce integrated audit reports on audit of special agriculture funds and submit such reports to audit institutions at the next higher levels.

Integrated audit reports shall truly disclose basic information about audit of special agriculture funds conducted by audit institutions at the corresponding and lower levels, overall evaluation of the  input, management and utilization of special agriculture funds, analysis and recommendations concerning issues of macroscopic readjustment and control of agricultural input policies.

Article 14    Audit institutions shall conduct audit of budgetary (estimate) implementation, final accounts and foreign fund application of agricultural construction projects in accordance with the Practice Directions of Audit Institutions for Auditing Budgetary (Estimate) Implementation of State Construction Projects, the Practice Directions of Audit Institutions for Auditing Final Accounts at the Completion of State Construction Projects and the Practice Directions of Audit Institutions for Auditing Projects with Foreign Loans and Assistance.

Article 15    The authority to interpret these Practice Directions rests with the CNAO.

Article 16    These Practice Directions shall come into effect as of January 1, 1997.