Research On Internal Control System Of Chinese Administrative Institutions

In China, administrative institutions form a special group of social organizations. They undertake the key responsibility to draw up and organize specific implementation of policies, directly aimed to provide social service, and mostly funded by financial allocation. In some sense, it's said that administrative institutions play a leading role in determining the trend of China's development. Compared with internal management of enterprises, non-profit organizations and other social organizations, that of administrative institutions, however is comparatively backward and mismatching with the significant social responsibility, represented by ambiguous duty separation, low management efficiency, high administrative cost and frequent graft and spawned corruption, etc. These problems have attracted broad attention, some of which have caused people's disaffection, even social contradictions. Therefore, how to improve the management level and create better management mode of administrative institutions has become an oncoming train. The18th National Congress of the CPC also put forward that under the guidance of the Scientific Outlook of development, we should reduce administrative cost, innovate new administrative management mode, increase government's credibility and executive ability, advance the performance management of the government.There is a saying that strong with under control, weak with no control and mess with out of control. To establish a sound internal control system provides an approach to solve above problems. While unlike the relatively complete internal control system of enterprises, the internal control of administrative institutions is still in the start-up period, with the framework needs to be perfected and higher level of importance needs to be placed. In some institutions, although there has established internal control system, it's not implemented effectively. The academic researches on internal control of administrative institutions are also limited, especially lack of connection with practice of administrative institutions. The dissertation, therefore, chooses the internal control system of administrative institutions as the object of study and researches around the framework of internal control and control activities of main business practices, aimed to make up for the shortcomings of internal control of administrative institutions, to provide guidance for the practice of internal control of administrative institutions and to explore an effective approach to improve the management level of administrative institutions. Above content is introduced in chapter1, together with the literature review, structure, innovation and shortcomings, etc.The dissertation put forward that the framework of administrative institutions internal control system consists of the goals of internal control, components of internal control and specific control activities, on the basis of the1992version of the Internal Control—Integrated Framework, released by the COSO and drawing lessons from the Standard of Administrative Institutions' Internal Control (Exposure Draft) released by the Accounting Department, Ministry of Finance in Dec.2011. The goals of internal control of administrative institutions include reasonably ensuring the compliance of the institution's business activities with applicable laws and regulations, improving the efficiency and the effectiveness of public services provided, reasonably ensuring the reality and accuracy of financial information and other related information, reasonably ensuring the safety and complete of assets, as well as the efficiency of fund use, preventing and punishing the corrupt practices. These5goals are indispensable parts of the goal system of administrative institutions'internal control. Because of the different control level, each goal represents a unique position and plays distinctive role in the goal system. The components of administrative institutions' internal control agree with the5components of COSO Internal Control-Integrated Framework, which are control environment, risk assessment, control activities, information&communication, monitoring. Although the internal control components of administrative institutions and enterprises share same extension, as a result of differences in organization form and business operation nature, the internal control components of administrative institutions have their own intension. These are the main content of Chapter2. Research on specific control activities is one of the key contents of the dissertation. In Chapter3?6, the dissertation starts with main business activities such as budget management, revenue and expenditure control, assets and liabilities management, analyzing the design, implementation and evaluation of specific control activities. While designing control activities, it follows such a train of thought as procedure introduction—risk assessment—control activities design. On the basis of analyzing main business activities such as budget management, it provides an initial package of control activities on the business procedure horizon. Finally, self-assessment of administrative institutions' internal control should become one of the important works to strengthen internal control.