Study On Administrative Cost Control Of Administrative Units From The Perspective Of Internal Control Theory

Administration cost is the total consumption of public resources for providing public products and service. The "Cheap-running Government" theory proposed by Marxist argues that the government should minimize its resource consumption while satisfying the interests and demands of people to the greatest extent.However, due to the imperfect of legal system, the lack of effective supervision and the lack of cost awareness, driven by department and individual interests, the administration cost of administrative units still stays high with an upward trend. This situation has aroused the concern of all circles of society, and become a research focus in resent years. Reducing the administrative cost has become an important requirement and goal of deepening the reform of government departments’ administrative system. Therefore, exploring control methods of administration cost may considerably lower administration cost, enhance administrative efficiency. Meanwhile, it may also generate great political and social influence by "correcting" the government functions.The author collected and went through relevant literatures and research findings in elaboration and application of governance theory, administrative cost theory and internal control theory, found the relationship between administrative cost and internal control. After combing the existing literature and research results on the basis of careful search of the relevant statistical data, the author will start from the connotation of the internal control of administration units with exemplified practice of the administrative institutes of Yunnan Province in administration cost control and explore how to control administration cost efficiently by designing an internal control system for administrative units.Based on the above-mentioned data analysis and theory research, the author proposes that one of the most efficient ways to control the administration cost of administrative units is facilitating the internal control system construction, explains and describes how each link under the system functions, highlights what is most significant to achieving effective control and explicating the goal. Concerning internal control, one of our research findings is that the internal control system of administration units is not limited to practicing internal control on financial matters; rather it is the sum of all the control systems in the unit. We also discovered through system design that raising the awareness of the leadership and employees on internal control is particularly significant to the establishment of a functioning internal control system. How to avoid and regulate potential risks arising from human factors is a key issue to consider in system design.