A Study Of Rebudgeting Of The Central Departments And Its Accountability Path In China

Subject: A Study on Rebudgeting of the Central Department and Its Accountability Path in ChinaSpecialized Field: Public AdministrationTutor: Professor Mr.Zhang QinpeiFinancial accountability is referred to that public budget must fulfill the corresponding fiduciary duty. After the establishment of the modern budget system, it has become a very effective control system which supervises and constraints the use of power, as well as a basic and important accountability tool. Once the budget is approved by the legislative, it has the power of law and should not adjust at discretion. However, rebudgeting is inevitable during the budget execution. Accountability budgeting alone can not guarantee financial accountability, while rebudgeting accountability is just an essential component of financial accountability. Rebudgeting occurs in many countries over the world, and waste and fraud caused by it are inevitable. However, the study on rebudgeting at domestic and abroad are very limited, in particular, domestic study is still at a lower level. In view of the domestic rebudgeting study's "poverty" both in quantity and quality, especially the "extreme poverty" at the central department level ,As PhD dissertation, This paper takes"A Study on Rebudgeting of the Central Department and its Accountability Path in China"as title and combines normative and empirical study. Based on sorting out the framework of rebudgeting, the paper examines rebudgeting accountability at the level of central department through the analysis of empirical data, and explores the path to achieve rebudgeting accountability. It consists of five parts in all.The introduction part describes the research motivation, research values, literature review, research framework design, methods selection, and innovation and limitations; while the conclusion part summarizes the main conclusions and follow-up research issues as well as proposals. In addition to these, each chapter is summarized as follows:Chapterâ… Overview of Rebudgeting.Several foreign scholars put forward some definition of rebudgeting, among which there are similarities and common deficiencies. Most of the definitions are description of rebudgeting nature and bright future without definition of its intension and extension. Provisions of rebudgeting in'Budget Law'are still ambiguous and untimeliness, which result in different interpretations by different scholars on definition of rebudgeting. The author proposed a definition of rebudgeting in this dissertation on the base of studies at home and abroad, then sorts out the rebudgeting pattern and mode. We should define rebudgeting on the basis of the approved budgeting, the total amount and structure changes of budget revenue and budget expenditure both belong to rebudgeting. However, rebudgeting accountability goals are facing such a dilemma: neither taking "good result" nor "good procedure" as the goal, it can not ensure that budget adjustments will really achieve a "good result". According to Shick's public budget goals, the writer claims that rebudgeting accountability includes rebudgeting amount controlling, rebudgeting allocative efficiency, and rebudgeting management efficiency. Besides, rebudgeting goals would be achived by authority accountability and social accountability.Chapter II the Central Departments and its Rebudgeting.The central departments in this paper specifically refer to the central administrative departments, which play different roles in the budget process. Budget management can be divided into two types around the world: centralized and decentralized. China has a "dual budget" management system. Among the central departments, the expenditure departments submit their recourse applications to core budget agency or budget management agency: the Ministry of Finance and National Development and Reform Commission. The core budget agency or budget management agency allocates resources by the applications from the various expenditure departments. Public resources are limited while public demands are unlimited, so the core budget agency, legislature and government heads have the responsibility to protect the resources. The budget management system of the central department in China is basically "dual budget", the Ministry of Finance and National Development and Reform Commission are the main management bodies. Ministry of Finance is responsible for the projects beyond capital construction projects, technology promotion projects and agricultural comprehensive development projects. National Development and Reform Commission is responsible for capital expenditure such as capital construction projects and major investment projects. Based on the analysis of the operating mechanism and budget framework of central departments, the dissertation develops an analytical framework for the central department rebudgeting mode from two dimensions: one is funds changing mode, and the other is the budgetary revenue and expenditure system. The analytical framework is used in Chapter III.Chapter III Empirical Analysis on Rebudgeting of the Central Department.Inspection on legislative approval of rebudgeting proves that rebudgeting management efficiency of the central departments is still at a low level during 1998-2009. Inspection on amount rebudgeting proves that rebudgeting amount controlling of the central departments is not successful during 1998-2009. Analysis on structure rebudgeting shows that the central departments'indulgence and negligence on structure rebudgeting can not ensure the achievement rebudgeting allocative efficiency. The final conclusion from the above analysis and its reasoning is that: rebudgeting accountability level has not rise from 1998 to 2009. Budget management power is the key element affecting the rebudgeting, rebudgeting transfers accompany budget management power. The total amount's growth of rebudgeting is mainly due to the central budget management departments. Rebudgeting modes affecting rebudgeting accountality of the central department are divided in three categories:the first are rebudgeting modes whose subjects are budget agencies, such as unused funds, balances unchecked-up, expensing balances the years before, delay and supplementary appropriations; the second are rebudgeting modes whose subjects are expenditure departments such as misappropriation and accounting "games", the third are extra-budgetary revenue which occur in all of the central departments.Chapterâ…£Rebudgeting Accountability Paths selection for Central Departments.Establishing a core budget agency will help to enhance rebudgeting total controlling for the central departments. The dual budget system lacks of necessary authority in China, and gives birth to rebudgeting. Therefore, the core budget agency should be established to control total amount budget. Hierarchical management of rebudgeting is propitious to increase its management efficiency and allocative efficiency, but in current China, hierarchical management of rebudgeting of the central layer is not clear, which causes the confusion of rebudgeting management. Defined levels of rebudgeting clearly, and that the implementation of hierarchical management of rebudgeting are propitious to achieve the accountability of rebudgeting. Governmental financial reporting system based on accrual basis is the necessary tools of core budget agencies, legislature, people understanding the budget adjustment information, the implementation of democratic supervision to ensure the achievement of rebudgeting accountability. Besides, accrual accounting helps to strengthen the total control of rebudgeting. The intensity of the audit of the central department budget execution audit efforts directly influences on its correction ability and accountability capacity to rebudgeting. As audit institutions are still being developed in the administrative system, it limits the breadth and depth of rebudgeting action of the audit. For current China administrative system, it is not possible to achieve independent or legislative audit in a short period of time. Therefore, we can enhance correction capability for rebudgeting only by improving the budget execution audit capability of the National Audit Office. Budget democracy is the fundamental path of rebudgeting accountability.The achievement of any content of rebudgeting goals must ensure democratic oversight. Without democratic oversight, the total control of rebudgeting will not be achieved, the allocative efficiency of rebudgeting can not be achieved, and the management efficiency of rebudgeting can not be achieved as well.