Article 1    These Practice Directions 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 improving auditing supervision over central budgetary implementation and other revenues and expenditures of public finance.

Article 2  The National Audit Office of the People's Republic of China (hereinafter referred to as the CNAO) shall, under the leadership of the Premier of the State Council, carry out auditing supervision over central budgetary implementation, maintain the legal solemnity of the central budget, promote strict implementation of the Budget Law by the central government departments (including their direct subordinates, similarly hereinafter), help fulfill the function of central budget in the macroscopic readjustment of the state and ensure healthy development of the national economy and society.

Article 3  Audit of central budgetary implementation should facilitate management of central revenues and expenditures by the State Council and supervision over central budgetary implementation and other revenues and expenditures of public finance by the Standing Committee of the National People's Congress, promote effective exercise of the function of budgetary management by financial departments and tax authorities of the State Council and other relevant central government departments and accelerate the progress of legalizing  audit of central budgetary implementation and other revenues and expenditures of public finance.

Article 4  The CNAO shall audit the truthfulness, compliance and effectiveness of the implementation of the central budget and that of  other revenues and expenditures at the central level as well as budgetary implementation and final accounts at the provincial level.

Article 5    Audit of central budgetary implementation shall cover the following major items:
(1) Review of and reply to budgets of central government departments by the Ministry of Finance in accordance with the central budget approved by the National People's Congress, adjustments made in the course of central budgetary implementation and variations of budgeted revenues and expenditures;
(2) Various central tax revenues, profits turned over by central enterprises, special revenues and ear-marked subsidies refunded to the Treasury and allocated to enterprises, which are collected in time and full by revenue authorities such as the Ministry of Finance, the Internal Revenue Service (hereinafter referred to as the IRS) and the General Administration of Customs (hereinafter referred to as the GAC) in accordance with relevant laws, administrative regulations and stipulations of financial departments and tax authorities of the State Council;
(3) Appropriation and payment of funds for central budgetary expenditure by the Ministry of Finance in accordance with the approved annual budget, fund utilization plans, relevant budgetary levels and procedures and the progress of utilization by the fund users;
(4) Appropriation and payment of funds and the settlement of accounts thereof for subsidizing local expenditures by the Ministry of Finance in accordance with relevant laws, administrative regulations and financial management systems;  
(5) Management of the repayment of principals with interests for domestic and overseas debts by the Ministry of Finance in accordance with relevant laws, administrative regulations and the Ministry's own related stipulations;
(6) Implementation of annual expenditure budgets, financial systems and the system of public finance by central government departments and the consequent relevant economic construction and development; turn-over of budgetary revenues by departments and units with the task of turning over such revenues;
(7) Receipt of central budgetary revenues and payment of central budgetary expenditures by the Treasury in accordance with relevant state stipulations;
(8) Revenues and expenditures specially managed according to relevant stipulations with due authorization from the Premier of the State Council.

Article 6    Audit of other revenues and expenditures of public finance at the central level shall cover the following major items:
(1) Management and utilization of not-on-vote funds and paid utilization of funds by the Ministry of Finance according to relevant laws, administrative regulations and its own relevant stipulations;
(2) Management and utilization of not-on-vote funds by central government departments in accordance with relevant laws, administrative regulations and stipulations of the Ministry of Finance.

Article 7     In order to improve audit of central budgetary implementation, audit or audit investigations shall be conducted of issues related to the overall position of state public finance in budgetary implementation and final accounts of provincial governments such as implementation of  budgets, tax laws and administration regulations, allocation and utilization of local expenditure funds subsidized by central public finance as well as the management and utilization of not-on-vote funds at the provincial level.

Article 8    According to stipulations of the Audit Law on the system of reporting audit work, the CNAO shall, during the first quarter of the year, conduct on-spot audit of previous year's realization of respective compositions of the central budget by the IRS, subordinate units of the GAC and relevant central government departments as well as other revenues and expenditures of the above-mentioned audited bodies, and shall, during the second quarter of the year audit previous year's implementation of the central budget.  The CNAO shall timely organize special audit investigations into particular aspects of budgetary implementation.

During the second quarter of the year, the CNAO shall submit to the Premier of the State Council its report on audit results concerning previous year's central budgetary implementation and other revenues and expenditures of public finance.

Each year, as entrusted by the State Council,  the CNAO shall submit its report on audit work concerning previous year's central budgetary implementation and other revenues and expenditures of public finance in accordance with arrangements made by the Standing Committee of the National People's Congress.  

Article 9     Financial departments and tax authorities of the State Council and other central government departments shall submit to the CNAO the following documents:
(1) The central budget approved by the National People's Congress, budgets reviewed and replied to by the Ministry of Finance for central government departments, annual revenue plans of revenue authorities and customs departments as well as budgets of subordinate units reviewed and replied to by their relevant central government departments;
(2) Monthly statements, final accounts and annual statements concerning central budgetary implementation and fulfillment of plans for  the collection of taxes and customs duties as well as final accounts for not-on-vote funds and revenues and expenditures of paid utilization of funds;
(3) Bulletins and integrated statistical annual reports on taxation and public finance as well as rules and regulations on public finance, budget, taxation, finance and accounting;
(4) Drafts of consolidated final accounts prepared by individual central government departments.

Article 10  Within its mandate and according to relevant laws and administrative regulations, the CNAO shall produce audit opinions or make audit decisions against acts in violation of the budget or acts of revenues and expenditures in violation of state stipulations in the course of organizing budgetary implementation by financial departments and revenue authorities of the State Council and other central government departments.   Where serious problems are found, recommendations for imposing sanctions shall be submitted to the State Council.

Article 11  The CNAO may put forward recommendations for imposing sanctions and submit them to the State Council for review and decision-making where financial rules and regulations promulgated by financial departments and tax authorities of the State Council and other central government departments conflict with relevant laws and administrative regulations or where certain inappropriate aspects of such rules and regulations require relevant correction or improvement.

Article 12  Where the audited bodies violate the Audit Law by refusing or obstructing audit examinations, the CNAO shall order them to make corrections, may circulate notices of criticism or issue warnings. Those resisting the CNAO's order to make corrections shall be investigated for legal responsibility.

Article 13   The Audit Office of the People's Liberation Army of the People's Republic of China (hereinafter referred to as the People's Liberation Army) shall submit both to the Central Military Committee and the CNAO its report on the result of auditing budgetary implementation by the People's Liberation Army and the latter's other revenues and expenditures of public finance.    

Article 14  Audit institutions at the level of provinces, autonomous regions and municipalities directly under the central government may formulate their own practice directions for audit of local budgetary implementation with reference to these Practice Directions and in combination with their local circumstances, which shall be submitted to the people's governments at the corresponding levels for approval and to the CNAO for filing.

Article 15  These Practice Directions shall come into effect as of the date of promulgation.