The Study On Internal Control Of Government Budget Management

For a long time, in the field of business and government, using the internal control measures efficiently and effectively to strengthen management has become an important management concept and method. With the release of 1992 COSO internal control framework, the internal control management thinking gets a wide range of promotion and application in a number of areas, including the government management area. However, theoretical research and practical activities within the government-controlled largely concentrated in department of government. The internal control level of whole government budget managements rarely involved. According to the spirit of eighth session of the Third Plenary Session, modern government budget system is the basis of the modern financial system. Needless to say, the internal control level of the government budget management largely determines the effectiveness of modern sophistication and institutional budget system. At the government level, the budget is a complete whole, which is the basis of various funding sources and economic affairs department of the government to organize an effective supply of public goods and services. It is a difficult thing to imagine that an effective co-ordination and the total absence of control, the budget management process can last for a long time. Therefore, the study of the internal control of the government budget management is of great significance. Most countries, the financial department is a core institution of the government budget management, namely in charge of the government budget preparation, execution, supervision and management work. the financial department should be assumed the implementation of budget management body of work of internal control.COSO internal control framework theory is widely used in the enterprise field, and plays an important role in improving the corporate governance. The internal control of government is product of the reform boom of the developed countries in 1980 s. As an ideological management philosophy, the internal control has become one of the important measures of government’s market-oriented reform. In this paper, the budget management internal controls at government level, mainly choose the COSO internal control framework as the main logical structure, combined with its own characteristics and the development of China’s government budget government budget management. Public Accountability theory is the theoretical basis of this paper, just like the field of internal control for companies was built on the principal-agent contract relationship. In addition, the paper within the foreign literature on the government budget management, internal control, budget control and budget management practices and other aspects were collected and summarized for the intention to establish government budget management which is suitable for China’s own internal control framework system.This paper contains five parts, namely introduction, review of researches, theoretical foundation, the main framework, research conclusions and recommendations section.First, the part of public accountability theory. Public accountability theory is the basis of the government budget management and analysis of internal control. Based on the concept of public accountability, the type of elaborate, combining the specific content of budget management, public accountability will clear fiduciary responsibility for financial resources. From the perspective of internal control subject object and goal, analyze the relationship between the financial resources and other fiduciary responsibility and budget management of internal control, and pointed out the limitations of financial resources fiduciary responsibility in the area of budget management. Reveal the path to achieve financial capital from institutional fiduciary responsibility, compliance and performance, as well as the three aspects of internal and external relations.Second, The budget management internal control framework of the financial sector at the government level. From the government budget management internal control body, goals and three parts constituent elements, build the internal control framework of the financial sector at the government level. Among them, the government budget management internal control body is the financial sector; government level budget management internal control objectives include four aspects: total control, allocate efficiency, operational efficiency and compliance; Consistent with the COSO internal control framework, the constituent elements of the government budget process internal control also include five parts: control environment, risk assessment, control activities, information and communication, and monitoring.Internal control environment is the foundation of the other four elements, which provide the basic rules of government budget management and internal control framework, and the impact of government budget process internal control environment factors include five areas: local government finances, the power structure of the budget, the public trustee to fulfill the responsibility of the government budget participants integrity and ethics and financial accountability in five areas.Internal control risk management of government level mainly refers to the total budget revenue control risk, the total expenditure control risk and the local government debt control risk. The total fiscal revenue control risks include short fiscal surplus and fiscal income. The total expenditure control risk in the financial sector is the primary objective of the government budget management, mainly department budget approved at the beginning of the financial sector as well as funds set aside and the surplus that year. Local government debt risks include the risk of direct debt and contingent liabilities risk. Local government debt Total control risks include the risk of direct debt and contingent liabilities risk. Local government direct debt refers primarily local government bonds, according to the overall arrangements of the local central government. Liabilities mainly refer to the risk of government debt risk financing platform.The internal control activities of government budget refers to the policies and procedures that ensure the management instructions implemented. Internal control activities include the budget decision-making and specific control activities. Through the analysis of decision-making model between US federal budget and China at all levels of government, the decision-making model can be divided into legislative budget led executive-legislative, executive decision-making model and the mutual constraints decision-making model. In our executive-led budget decision-making model, at the government level, the financial sector needs to carry out related activities from the full aperture control budget, mid-budget, performance budgeting, government accounting and financial information and other aspects.In the government budget management process, the financial sector need to collect, collate and use a lot of income and expenditure related information, which is the premise of the successful completion of budget management. Because of the government budget management process involves a number of budget actors, so communication between each other is very important. Under different budget management, financial departments have different functions tendencies, in which the communication is the most basic and most effective functions to achieve budgetary management control.Supervision is necessary to ensure the quality of internal control operation. Financial supervisory bodies of the financial sector is necessary to become the independent professional organization of internal audit function during the government budget management internal control, and play an important role by reviewing the internal control environment at a reasonable, assessing properly the internal control risks and implementing actively the control activities.The ultimate goal of this paper is to establish a modern government budget system, serve the needs of the entire budget management. At present, no matter theorists or practitioners departments, the research of t budget management internal control on government level control problem is less, or some research is not comprehensive enough. By drawing on COSO internal control framework, from the perspective of the financial sector, this paper initially built a frame of the budget management internal control of government level, which provide the research perspectives and ideas for budget management involving multiple levels of government budget participants.