Budget review is an important part of the congressional supervision in China.

China's Constitution stipulates that one of the major functions of the National People's Congress (NPC), the nation's top legislative body, is examining and approving at its annual meeting the central budget and the report on its implementation.

"Improvement of budget review and supervision should accompany budget reform, with particular regard to compilation of the budget," said Su Ning, vice-director of the NPC Budgetary Work Committee.

Su's committee was established at the end of 1998, the first year of the incumbent Ninth NPC's five-year tenure, to assist the NPC Financial and Economic Committee to review the central budget and the final accounts as well as oversee the implementation of the central budget.

"The more detailed the budget is laid out, the easier and more efficient the budget review will be," he said.

The NPC Standing Committee passed a decision on enhancing supervision of the central budget at the end of 1999 to make the nation's overall spending plan more manageable, clear up random expenditures through enhanced supervision and curb corruption.

The decision requires the State Council, China's cabinet, to draft a more detailed and better structured budget, which is consistent with the requirements of the budget reform started by the State Council in 2000.

Prior to the reform, the budget was organized by type of expenditure, instead of according to the spending plans of governmental agencies.

The original budget, classified by uses such as administrative expenditures and infrastructure costs, makes it a cake shared among governmental agencies and sliced up by the Ministry of Finance.

"The money cannot be allocated reasonably, and it is difficult for both the Finance Ministry and other governmental agencies to control, manage and supervise the use of the money," Su said.

Under the new compilation method, the budget will be broken down by department, allowing the NPC to have a clearer picture of how much money each department is spending.

As a trial operation, the ministries of agriculture, education, science and technology as well as labour and social security submitted their separate budgets to the NPC in 2000.

The practice was expanded to 26 out of the 29 departments under the State Council in 2001 and 2002.

Su said the budget should be more detailed so that they are clear about not only how much each department is spending, but also how the money is spent and how efficiently it is spent.

The budget reform has also led to an earlier drafting of the budget, so that legislative officials have more time for review and the budget can be approved earlier.

The Ministry of Finance now drafts the budget in July, four months earlier than previously.

The ministry is legally required to inform the NPC Financial and Economic Committee and the NPC Budgetary Work Committee of the process of drafting the central budget.

The primary version of the central budget should be submitted to Su's committee for preliminary review six weeks before the annual NPC meeting.

The committee will then report their suggestions on how to adjust the budget to the NPC Financial and Economic Committee, based on its analysis and prediction.

Su said his committee is expecting the government to make a mid-term budget besides the current annual budget so that spending could be arranged for a longer range of time.

His committee has already started research in this regard.

Su said they will invite some academic institutions to help them establish related models in a bid to improve budget supervision.

(China Daily February 20, 2003)