Case Study On Internal Control Of Red Cross Society Of China

Since the China Children and Teenager's Fund,the first public welfare foundation in China was founded in 1981,Chinese philanthropy has entered the stage of rapid development under the market economy condition.Especially after the “WenChuan Earthquake” in 2008,Chinese citizens' enthusiasm of charity was lit up and an increasing number of citizens has participated in philanthropy.However,in recent years,the problems of corruption and inefficiency of Chinese public welfare and charitable organizations have been exposed to the public,which seriously decreased those organizations' credibility and even influenced the development of Chinese philanthropy.The internal cause why Chinese public welfare and charitable organizations met those problems is that their internal control has some defects,so if they want to improve their efficiency,enhance their credibility and realize sustainable development,they must attach importance to the construction of their internal control.Recently,some important laws and regulations about internal control of Chinese public welfare and charitable organizations has been issued,including “Administrative Institutions Internal Control Standard(on trial)”,“Charity Law of People's Republic of China” and “Law of the People's Republic of China on the Red Cross Society” etc,which raise more strict requirements on the construction of internal control of Chinese public welfare and charitable organizations.Based on the “Administrative Institutions Internal Control Standard(on trial)”,through the combination of public welfare and charitable organization,internal control and related theories and case of Red Cross Society of China,I analyze the existing problems and causes of internal control of Red Cross Society of China and raise relative advice.At first,I briefly describe the relative theories about internal control of our public welfare and charitable organization,including the concept,traits and content of it.Then I take the Red Cross Society of China as an example,describe the condition of its internal control from organization and practice levels,analyze the defects and the causes of its internal control and the causes include organizations' internal control legal system not complete,external supervision mechanism not sound and those organizations having high dependence of government.At last,I propose relative improving methods of internal control,which are as follows.First,construct scientific organizational structure,improve human resource policies and strengthen employees' internal control consciousness.Second,establish specific risk management department and strengthen the prevention and control of risks.Third,strengthen the budget preparation and strengthen the management control of funds.Fourth,strengthen the construction of information system and enhance the transparency of information.Fifth,raise the importance of internal control and strengthen internal supervision.Through the comprehensive analysis of internal control of the Red Cross Society of China,this paper puts forward the countermeasures and suggestions to improve its internal control,which will play a certain reference role in the construction and improvement of internal control of other public charity organizations.