Closer eye on budget funds

Updated: 2014-11-27 07:33

(China Daily)

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Having more money at hand than one can actually spend may be a dream scenario for many. But not for the thousands of governments in this country at this time of year.

Numerous local leaders are racking their brains for ways to make sure they don't have a budgetary surplus at year's end.

So, as in each past year, an end-of-year government spending spree is going on across the country.

From January to October, governments at all levels fulfilled only 74.2 percent of budgetary expenditures for fiscal year 2014. Which means they will have to spend the rest, nearly 4 trillion yuan ($656 billion), in two months, or any unspent will have to be returned to the central coffers.

No government wants that to happen, because, under the country's current base budget system, unspent budgetary surplus at the end of the year may result in a corresponding cut in its budget the following year.

Yet with less than five weeks to go before 2015, unless a government does have truly operational projects at hand, it will be no easy job to use up all that money.

Previously, local governments had little trouble diverting such money to finance wining and dining, sightseeing, or improving staff welfare. But those "good old days" are gone thanks to the harsh anti-graft campaign and tighter oversight.

So complaints about the government spending upsurge this year are less about the way budgetary surplus is squandered, more about the pressing need to have the outdated budget management mechanisms fixed.

Doing that, however, entails systematic review of the compilation, approval, execution and oversight of government budgetary plans.

In order to get more money, local governments are inclined to exaggerate financial needs in forward-looking budget making.

The legislative scrutiny of government budgetary reports is a routine component of the annual sessions of national and local people's congresses, or the legislature. But it has by and large failed to fulfill the supervisory functions because lawmakers either do not have the time or lack the necessary knowledge.

But as oversight tightens up, it will become increasingly difficult for government institutions to squander at will, and unsound budgetary plans don't seem to be a major trouble for the long term.

An obvious technical necessity at this point is to shorten the time lag between the approval and allocation of budgetary funds. It is not rare for local governments to receive budgetary funds allocated from central coffers until the third or fourth quarter.

A more convenient way, of course, is to reschedule the process so that budgetary funds are no longer spent in such a hurry.

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