The Comparative Study Of Internal Control Elements Of Administrative Institutions

Administrative institutions which is the main body of our government administrating according to law, undertake the functions such as macro-economic control, market supervision, social management, public services and so on. They have close relationship with the construction of socialist democracy and law, the development of marketing economy, the harmony of the society and people’s life and work. Since administrative institutions dominant massive public resources and their funding mainly comes from financial provision, resulting the lack of direct relationship with the assets they used. This trait would bring the risks suck as inefficient use of public resources, loss of state assets and corruption. Internal control, which is built on basis of functional management, can form multi-dimensional control system by process management. It helps administrative institutions fully understand the risks, reduce risk, until mitigate risks, which will finally improve risk management. Therefore, it is of great importance to implement internal control system in order to improve the management level of administrative institutions and the quality of public service, finally the built of service-oriented government.Compared with the enterprises, the internal control theory of administrative institutions originated late, with low maturity. The Internal control theory of enterprise provides a microscopic basis for the development of administrative institutions internal theory. From the international point of view, the theory of government and public sector internal control has gone through four stages, namely the start-up phase, formation, improving and perfect period, which changed from the initial supervised by the General Accounting Office and the government department to the multi-supervisions parts on internal control. Based on the latest theories of enterprises, and continuous improvement of laws and regulations, the internal control of administrative institutions abroad has formed a relatively complete systemDue to the nature of the administrative institutions, the business scope of business activities relatively stable, and their funding obeys to the budgeting, which means the sources and uses of funds is relatively clear, so risks they faced are significantly different enterprises. So it needs to establish a set of internal control which different from the enterpriseIn November2012, the Chinese government released the "administrative institutions internal control standards (Trial)", which is developed on basis the COSO internal control framework. It introduced the enterprise management methods such as risk management, process management to the non-profit organizations combined with Chinese national conditions and characteristics of the administrative institutions of business activities, achieving an innovation in internal control theory. Meanwhile, the norm is different from the U.S."The federal government internal control standards," which didn’t talk about the basic concepts of government departments, but specify to the operational level, such as the budget business, government procurement and other business activities of the administrative institutions.Based on the above background, this paper, based on the retrospection of internal theory of both domestic and aboard, makes a comparative analysis of the internal control elements of enterprise and administrative institutions, in order to conclude management nature of administrative institutions which is distinct from that of enterprise management, thus providing some inspiration for the promotion of the construction of internal control within administrative institutions. The dissertation includes four parts. The first part introduces the background and significance of this paper. It also summarized the related literature of internal control. The second part of this paper introduces the base of this research, which discusses the scope of administrative institutions, business activities, reform developments and internal control theory respectively. Thirdly, this paper discusses the difference of internal control elements between enterprise and administrative institutions, which include control environment, risk assessment, control activities, information and communication, internal supervision. The final part of this paper is the conclusion and some suggestions of developing internal control system within administrative institutes.