Research On Internal Control Of The Second Type Of Public Welfare Institutions

Presently internal control has played a key role in management of enterprises and institutions. In compared with enterprises, the source of funds of majority Chinese institutions is financial allocation. Their business transactions are relatively pure and simple. In recent years, institutions internal control system has been normalized constantly. Internal control norms of administrative institutions( for trial implementation)helps to improve the internal management level of the administrative institutions, it has come into force as of January 1,2014.Horever,the internal control system is still not perfect. There are loopholes in some units. This also leads to all kinds of favoritism, fraudulent practices and irregularities in institutions of recent years. With these issues continuously highlighted, the accuracy of accounting information and the work efficiency of institutions has been affected. This also has a bad effect on the economic development of the whole society.Issued by the Central Committee of the Communist Party of China and the Sate Council in 2012, The guiding opinions on the classification of the reform of public institutions divided the existing institutions into three kinds according to their social functions, they are institutions of undertaking administrative functions, engaged in the production and operation activities and engaged in public service in which can be subdivided into two types. Under the new circumstances of the reform of classification, institutions are facing many problems like implementation efficiency, resource allocation and risk assessment etc. In the meanwhile,the internal control of the second type of public welfare institutions has its own characteristic and particularity while the first type has no operating income and its daily expenses and service income are included national fiscal management. Studying on how to improve the market competitiveness through improving the internal control is very necessary to the second type of public welfare institutions under the background of classified reform.Based on the policy background of institutions reform and the theoretical background of the inadequate research of institutions internal control, starting from the problems that internal control of institutions are facing, this paper will give a theoretical explanation on the problems of internal control of second type of public welfare institutions, and meanwhile, taking A geological team as a case study, a conceptual design aimed to optimize the internal control will be proposed based on the deep study on the problems of its internal control and its complete accounting information. This study in further will refine the theoretical study fruits of internal control of institutions, and also make sense to give a solution to the new conditions in the course of institution reform, and make a certain support both in theory and practice in the coordination among the reforms measures in the institutions, especially in the second type of public welfare institutions, and in the push of the steady and reliable reform of institutions. There are five parts in this paper. The first part is mainly to give an introduction of the paper, namely the expatiation of the background, purpose, significance, literature review, threads of thoughts and method of this research. The second part is the theory pursuant of this paper, which makes a theoretical foundation for composing this paper. The third and fourth parts are the important contents of the paper, in which we will taking A geological team as a case study to probe into the problems of its internal control and further to give a optimization proposal on the internal control at the background of classified reform of institutions. The fifth part summarizes the main conclusion, problems and the direction of further research.