Article 1: In order to strengthen the management of fiscal investment review and standardize fiscal investment review practices, these Regulations are formulated in accordance with the "Budget Law of the People's Republic of China," the "Implementation Regulations of the Budget Law of the People's Republic of China," the "Government Procurement Law of the People's Republic of China," the "Regulations on Financial Management of Basic Construction," and other relevant laws and administrative provisions.
Article 2: Fiscal investment review is an important component of fiscal functions. By evaluating and reviewing the preliminary (estimated) budgets and final (settlement) accounts of projects funded by fiscal resources, as well as conducting special audits and follow-up assessments on the use of funds for fiscal-funded projects and other special fiscal funds, the fiscal authorities ensure the standardized, safe, and effective operation of fiscal funds—a fundamental guarantee for their proper management.
The financial investment review services are conducted by financial investment review institutions affiliated with the fiscal authorities or by qualified social intermediary agencies recognized by the fiscal authorities (hereinafter referred to as “financial investment review institutions”), which are commissioned by the fiscal authorities. Among these, social intermediary agencies are selected through domestic open bidding in accordance with the Government Procurement Law and relevant regulations.
Article 3: The scope of financial investment review includes:
(1) Construction projects funded by basic construction funds within the fiscal budget (including national bonds);
(2) Construction projects funded by special allocations within the fiscal budget;
(3) Construction projects funded by government funds, extra-budgetary funds, and the like;
(4) Construction projects financed through government-sponsored financing arrangements;
(5) Construction projects funded by other fiscal sources;
(6) Other projects or special funds that require specific verification and follow-up to assess effectiveness.
Article 4: The content of financial investment review includes:
(1) Review of the authenticity, accuracy, completeness, and timeliness of project preliminary (estimated) budgets and final (settlement) accounts;
(2) Review of compliance with basic construction procedures and implementation of basic construction management systems;
(3) Compliance review of project bidding procedures, bidding methods, bidding documents, and various contracts;
(4) Review of the reasonableness and accuracy of various payments related to project construction;
(5) Review of the use and management of project funds provided by fiscal sources, as well as the raising and availability of matching funds;
(6) Review of the project’s government procurement activities;
(7) Review of the implementation status of the project’s preliminary (or estimated) budget, as well as major design changes and claims arising during the project’s implementation process.
(8) Review the management and construction status of projects implemented under the construction agency system;
(9) Review of the project’s completion and operational status or its effectiveness;
(10) Review and approval of project proposals for special fiscal funds, as well as review of investment estimates in feasibility study reports and preliminary design budgets.
(11) Conduct special audits and follow-up evaluations on the use of fiscal funds.
(12) Other.
Article 5: Methods for reviewing fiscal investments:
(1) Evaluation and review of project preliminary (estimated) budgets and final (settlement) accounts. This includes: conducting ongoing tracking reviews throughout the entire project construction process, as well as performing individual reviews of both the project’s preliminary (estimated) budget and its final (settlement) accounts.
(2) Conduct special audits and follow-up evaluations on the use of fiscal funds;
(3) Other methods.
Article 6: Procedures for Fiscal Investment Review:
(1) The financial department selects and designates review (or verification—same applies hereinafter) projects, and issues letters of authorization for review to the project authorities and the financial investment review agencies.
(2) The project supervisory authority shall notify the project construction (or agency construction, the same applies hereinafter) entity to cooperate with the review work.
(3) The financial investment review agency shall conduct the review in accordance with the commissioned review documents and relevant regulations, formulate preliminary review opinions, and, based on thorough communication with the project construction entity, finalize the review opinions.
(4) The project construction entity shall provide written feedback on the review comments.
(5) The fiscal investment review agency shall submit the review report to the fiscal department that commissioned the review task.
(6) The financial department shall review and approve (or forward for approval) the evaluation reports submitted by the fiscal investment evaluation agencies, and, in conjunction with relevant departments, make decisions on how to address the evaluation opinions.
(7) The project supervisory authority shall urge the project implementation unit to carry out and rectify the work in accordance with the approval (transmittal) documents and handling decisions issued by the financial authorities.
Article 7: The financial department is responsible for the management and supervision of fiscal investment review work and shall perform the following duties:
(1) Formulate regulations and rules for fiscal investment review, manage fiscal investment review operations, and provide guidance on the business activities of fiscal investment review institutions.
(2) Determine and issue the entrusted review tasks, and put forward specific review requirements to the financial investment review agency.
(3) Responsible for coordinating the relationships between fiscal investment review agencies and relevant departments such as investment authorities and project authorities in fiscal investment review work.
(4) Review and approve (or forward for approval) the evaluation reports submitted by the financial investment review agencies, and, in conjunction with relevant departments, make decisions on how to address the review opinions.
(5) For project construction units that refuse to cooperate with or obstruct the financial investment review process, the financial authorities, depending on the specific circumstances, have the right to temporarily postpone issuing the budget for project-related fiscal funds or to suspend disbursement of such funds.
(6) Conduct spot checks or re-examinations of investment review reports submitted by fiscal investment review agencies as needed.
(7) Pay the review fees to the financial investment review agency entrusted with the task, as stipulated.
Article 8: The competent department of the project shall perform the following duties in the financial investment review work:
(1) Promptly notify the project construction unit to cooperate with the financial investment review agency in carrying out its work;
(2) For matters requiring cooperation from the project authorities to provide relevant materials, the relevant authorities shall promptly furnish the financial investment review agency with all materials necessary for the review process and shall be responsible for the authenticity and legality of the materials provided.
(3) Provide written feedback on the content in the review comments that pertains to the project’s competent authority;
(4) Based on the financial department’s approval (or forwarding) comments on the evaluation report, urge the project construction entity to implement and rectify the issues identified.
Article 9: The project construction entity shall fulfill the following obligations in the financial investment review process:
(1) Actively cooperate with the financial investment review agency in its work, promptly provide the agency with all relevant materials required for the review, and assume responsibility for the authenticity and legality of the materials provided.
(2) With regard to issues involved in the review process that require verification or evidence collection, you shall actively cooperate and must not refuse, conceal, or provide false information.
(3) With respect to the investment review opinions issued by the financial investment review agency for construction projects, the project implementing entity shall sign its comments within five working days from the date of receipt, and the comments must be stamped and signed by both the project implementing entity and the person in charge of the project implementing entity (specific format is provided in the appendix). If no comments are submitted within the specified time limit, the project implementing entity shall be deemed to have agreed with the review opinions.
(4) Promptly make rectifications based on the approval (forwarding) comments from the financial authorities on the evaluation report.
Article 10: The fiscal investment review agency shall carry out fiscal investment review work in accordance with the following provisions:
(1) In accordance with the Ministry of Finance’s requirements for quality control measures regarding fiscal investment reviews, internal professional personnel of the organization shall conduct review work in compliance with the law and assume responsibility for the authenticity, accuracy, and legality of the review reports.
(2) Independently complete the review tasks and shall not, in any form, re-delegate fiscal investment review tasks to other review agencies. For projects with special technical requirements that genuinely necessitate the engagement of relevant experts to jointly carry out the commissioned task, prior consent must be obtained from the fiscal department that commissioned the review. Moreover, the reviewing agency itself must undertake no less than 60% of the total review workload.
(3) For special projects involving state secrets and the like, hired personnel may not be used.
(4) Any significant issues encountered during the implementation of the review work shall be promptly reported to the financial department that commissioned the review task.
(5) Prepare complete review working papers and obtain signatures of confirmation from the relevant professional reviewers.
(6) Establish and improve an internal review mechanism for evaluation reports;
(7) Submit the evaluation report to the financial department that commissioned the evaluation task within the prescribed time frame. If it is not possible to complete the evaluation task within the prescribed time, promptly report to the financial department that commissioned the task and explain the reasons.
(8) Establish a stringent project archive management system to fully, accurately, and truthfully reflect and record the status of project reviews, and ensure proper filing and safekeeping of all types of documentation.
(9) Without the approval of the financial department that has entrusted the review task, the financial investment review institutions and their relevant personnel shall not, in any form, provide, disclose, or make public to external parties information related to the reviewed projects.
(10) No fees may be charged to the project construction entity.
(11) Shall bear corresponding legal responsibilities for providing false or misleading evaluation reports due to gross negligence or intentional misconduct.
Article 11: With the approval of the financial department that has entrusted the review task, reviewers may, for the purpose of conducting the review, inquire about relevant information from entities that have economic transactions with the project construction entity. They may also, in accordance with the law, request financial institutions to provide information on the funds held in bank accounts of the project construction entity and related entities.
Relevant authorities and financial institutions shall cooperate with the inquiry efforts of the fiscal investment review agencies.
Article 12: The financial department’s reply and handling decision on the evaluation opinions shall serve as one of the bases for adjusting project budgets, monitoring the progress of fund disbursement for project construction, processing settlement of project costs, and preparing final financial statements upon project completion.
Article 13: If the quality of the review report issued by the fiscal investment review agency fails to meet the requirements of the entrustment, serious errors occur during the review or verification process, the review and special verification services exceed the prescribed time limits without timely written explanation, or the explanations provided are insufficient, the fiscal department will accordingly reduce the fee for the entrusted service. In cases of serious violations, the fiscal department will refrain from paying the fee for the entrusted service altogether.
If a fiscal investment review agency intentionally provides review reports containing false or misleading information, the fiscal department will refuse to pay the fees for the commissioned services, terminate its qualification to undertake such commissioned work, and impose strict disciplinary measures in accordance with relevant regulations.
Article 14: For any violations of financial regulations committed by investment review institutions in their work of fiscal investment review, the financial authorities shall impose penalties in accordance with the "Regulations on Penalties and Disciplinary Actions for Financial Violations" issued by the State Council.
Article 15: The finance departments (bureaus) of each province, autonomous region, directly-administered municipality, and city under separate planning may formulate specific implementation measures based on these Regulations and in light of the actual conditions of their respective regions, and shall file such measures with the Ministry of Finance for record.
Article 16: The financial investment review institutions under the financial departments at all levels may, in accordance with these Provisions and relevant documents, formulate internal operating procedures for financial investment review, internal control and risk management measures for reviews, guidelines for review working papers and archives, regulations for the management of review personnel, and job descriptions for technical positions related to quality management of investment reviews. Such measures shall be submitted to the financial department at the same level for approval before being implemented.
Article 17: These Regulations shall take effect as of October 1, 2009. The “Interim Regulations on the Administration of Fiscal Investment Review” issued by the Ministry of Finance (Cai Jian [2001] No. 591) shall be repealed concurrently.