City govt spending becomes transparent

Updated: 2011-12-26 08:04

By Zhao Yinan (China Daily)

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Shen Xiangchen, director of the finance bureau who has masterminded the city's decade-long reform, said his initial motive in opening up the books, which in some places are still deemed confidential, was a "showdown" to let the public know that the government was short of money.

City govt spending becomes transparent 

"You can only make full use of the money after you really know how much you have," he said.

Wei Jigang, deputy director of the bureau's accounting center, describes the initial reform as "rainstorming".

After six months of preparation, the city government published a notice on a Friday in March 2000. Over the weekend, it froze the bank accounts of government agencies and took control of the accounting process through the finance bureau.

A thorough investigation into off-books accounting and arbitrary spending found about 200 million yuan in off-the-record income, accounting for one-third of the city's revenues of that year.

The retrieved money was used to pay government employees' delayed wages, subsidize free toilets and gardens and compensate older, unemployed residents.

Following the investigation, the finance bureau established an accounting center to handle all the financial affairs of city government bodies.

The government didn't punish any officials or accountants found to have appropriated public funds to their off-books accounts, said Shen. The decision suggests the move was aimed at securing stability and winning their support of the reform.

He said the campaign laid the basis of valid financial information. Without accurate data, subsequent reforms in budgeting and procurement would all be based on inaccurate figures.

Following the accounting reshuffle, Shen's next modification was aimed at the finance bureau itself.

The linear administrative structure that is widely applied in all levels of Chinese government was reorganized into a checks-and-balances system. Four sections - budget planning, execution, supervision and evaluation - were established to restrict one another.

In addition, internal supervision of the development and use of the budget was accompanied by social monitoring, such as public hearings.

Wang Tushan is an expert frequently invited to take part in public hearings by the finance bureau.

During a hearing about whether to install a global positioning system on buses this January, Wang's opposing opinion was adopted.

"I suggested slashing the budget for the system to 1 million yuan, instead of the proposed 5 million, and using the rest of the money to refurnish the buses," the former accountant said.

But progress can be hard.

Recalling the first public hearing in Jiaozuo, Shen said the event ended up a total embarrassment.

"The only person who applied to take part didn't show up on that day."

However, Shen said he retained confidence in the reform.

"It is true that some Western countries do a much better job than we do on this issue," he said. "But they have been fostering civic mindedness for more than 200 years, while we are just getting started," he said.