Chapter V Examination and Approval of Budgets

Article 38 The State Council shall， when the National People's Congress is in session， make a report to the Congress on the draft central and local budgets.

The local governments at various levels shall， when the people's congresses at the corresponding levels are in session， make reports to the congresses on their respective draft total budgets.

Article 39 The central budget shall be examined and approved by the National People's Congress.

The budgets of the local governments at various levels shall be examined and approved by the people's congresses at the corresponding levels.

Article 40 The government of a township， nationality township or town shall report without delay its budget approved by the people's congress at the corresponding level to the government at the next higher level for the record. A local government at or above the county level shall report without delay its budget approved by the people's congress at the corresponding level and the totalized budget submitted for the record by the government at the next lower level to the government at the next higher level for the record.

A local government at or above the county level shall， after totalizing the budgets submitted for the record by the governments at the next lower level in accordance with the provisions of the preceding paragraph， report the totalized budgets to the standing committee of the people's congress at the corresponding level for the record. The State Council shall， after totalizing the budgets submitted for the record by the governments of the provinces， autonomous regions and municipalities directly under the Central Government in accordance with the provisions of the preceding paragraph， submit the totalized budgets to the Standing Committee of the National People's Congress for the record.

Article 41 In case the State Council or a local government at or above the county level judges that the budget submitted for the record by the government at the next lower level in accordance with the provisions of Article 40 of this Law， contravenes laws or administrative rules and regulations， or contains other inappropriatenesses， and that the resolution approving the budget has to be cancelled， the said government shall submit the matter to the standing committee of the people's congress at the corresponding level for deliberation and decision.

Article 42 After the approval of the budgets of the governments at various levels by the people's congresses at the corresponding levels， the financial departments of the governments at the corresponding levels shall without delay give an official written reply regarding their budgets to the departments at the corresponding levels. The departments at various levels shall without delay give an official written reply regarding their budgets to their subordinate units.

Chapter VI Budget Implementation

Article 43 The implemenlation of the budgets of governments at various levels shall be organized by the governments at the corresponding levels， and the financial departments of the governments at the corresponding levels shall be in charge of the concrete work.

Article 44 After the beginning of a budgetary year and before the approval of the draft budgets of the governments at various levels by the people's congresses at the corresponding levels， the governments at the corresponding levels may first arrange their expenditures according to the amount of the budgetary expenditures in the corresponding period of the previous year. Upon the approval of the respective budgets by the people's congresses at the corresponding levels， the approved budgets shall be implemented.

Article 45 The departments responsible for collecting budgetary revenues must， in accordance with the provisions of the laws or administrative rules and regulations， collect in time and in full amount the budgetary revenues that ought to be collected， and may not， in violation of the provisions of the laws or administrative rules and regulations， carry out unauthorized reduction of， or exemption from collection of budgetary revenues that ought to be collected or postpone the collection thereof， and may not intercept， detain or misappropriate the budgetary revenues.

Article 46 The departments or units which have the obligation to turn over budgetary revenues must， in accordance with the laws， administrative rules and regulations and the provisions of the financial department under the State Council， turn over in time and in full amount the budgetary funds that ought to be turned over to the State Treasury （hereinafter simplified as the Treasury）， and may not intercept detain， misappropriate or default the turnover.

Article 47 The financial departments of the governments at various levels must， in accordance with the laws， administrative rules and regulations and the provisions of the financial department under the State Council， allocate in time and in full amount the funds for budgetary expenditures and strengthen the management of and supervision over the budgetary expenditures.

The expenditures of the governments， departments and units at various levels must comply with their respective budgets.

Article 48 The Treasury must be established in any budget at or above the county level； it shall also be established for any township， nationality township or town where conditions permit.

The business of the Central Treasury shall be managed by the People's Bank of China and the business of the local Treasuries shall be managed in accordance with the relevant provisions of the State Council.

The Treasuries at various levels must， in accordance with the relevant provisions of the State， manage promptly and accurately the collection， al location， retainment and turnover of the budgetary revenues， and the appropriation of the budgetary expenditures.

The power to dispose of the funds of the Treasuries at various levels is vested in the financial departments of the governments at the corresponding levels. Except as otherwise provided by the laws or administrative rules and regulations， no departments， units or individuals shall， without the authorization of the financial departments of the governments at the corresponding levels， have the right to draw on any funds from the Treasuries or dispose in any other forms of the funds already put in the Treasuries.

The governments at various levels shall strengthen the management of and supervision over the Treasuries at the corresponding levels.

Article 49 The governments at various levels shall strengthen the leadership over the budget implementation， support the budgetary-revenue collecting departments such as the financial departments， taxation and customs authorities to arrange budgetary revenues according to law and support the financial departments to strictly manage budgetary expenditures.

The financial departments， taxation and customs authorities shall in the course of budget implementation strengthen the analysis of the budget implementation and shall， whenever discovering any problems， promptly suggest that the governments at the corresponding levels adopt measures to sett1e them.

Article 50 Departments or units shall strengthen the management of the budgetary revenues and expenditures， and may not intercept or draw on the budgetary revenues which ought to be turned over， nor treat any non-budgetary expenditures as budgetary expenditures.

Article 51 The plan to draw on the budget reserve funds of a government at any level shall be made by the financial department of the government at the corresponding level and be submitted to the government at the corresponding level for a decision.

Article 52 The budgetary circulating funds of the governments at various levels shall be managed by the financial departments of the governments at the corresponding levels， and shall be used for the fund-circulating purpose in budget implementation， and may not be diverted to any other use.

Chapter VII Budget Adjustment

Article 53 Budget adjustment refers to any partial alteration of the central budget already approved by the National People's Congress or of the local budgets at the various levels already approved by the local people's congresses at the corresponding levels， which is made due to expenditure increase or revenue reduction necessitated by special circumstances in the implementation of the respective budget， thus making total expenditures exceed total revenues in the original approved balanced budget or making an increase of the debts to be borrowed as compared with the original approved budgets.

Article 54 The governments at various levels shall， with regard to indispensable budget adjustments， work out plans for budget adjustments. The adjustment plan of the central budget must be submitted to the Standing Committee of the National People's Congress for examination and approval. The budget adjustment plans of the local governments at or above the county level must be submitted to the standing committees of the people's congresses at the corresponding levels for examination and approval. The budget adjustment plans of the governments of townships， nationality townships or towns must be submitted to the people's congresses at the corresponding levels for examination and approval. No budget adjustment shall be made without due approval.

Article 55 In case budget adjustments are not approved， the governments at various levels shall not make any decisions making total expenditures exceed total revenues in the original approved balanced budgets or making an increase of the debts to be borrowed as compared with the original approved budget.

In case a decision is made in violation of the provisions of the pre ceding paragraph， the people's congress or the standing committee of the people's congress at the corresponding level or the governments at higher levels shall order a change or annulment of the decision.

Article 56 Changes in budgetary revenues and expenditures caused by funds returned or subsidies granted by governments at higher levels in the course of budget implementation shall not be regarded as budget adjustments. The local governments at or above the county level shall， on receipt of returned funds or subsidies， report the relevant situations to the standing committees of the people's congresses at the corresponding levels， The governments of townships， nationality townships or towns shall， on receipt of returned funds or subsidies， report the relevant situations to the people's congresses at the corresponding levels.

Article 57 The budgetary expenditures of a department or unit shall be implemented according to the budget items. Any necessary transfer of budgetary funds under different budget items must be reported for approval in accordance with the provisions of the department of finance under the State Council.

Article 58 After the budget adjustment plan of a local government at any level has been approved， the government at the corresponding level shall report such plan to the government at the next higher level for the record.

Chapter VIII Final Accounts

Article 59 Draft final accounts shall be compiled by governments at various levels， various departments and units in accordance with the schedule prescribed by the State Council at the end of each budgetary year.

The concrete matters concerning the compilation of the drat final accounts shall be arranged by the department of finance under the State Council.

Article 60 The compilation of the draft final accounts must conform to the laws and administrative rules and regulations and ensure the accuracy in accounting revenues and expenditures， the completeness of the contents and the prompt submission.

Article 61 A department shall examine， verify and totalize the draft final accounts of all units subordinate to it and then compile draft final accounts of its own and shall， within the prescribed time limit. submit such draft to the financial department of the government at the corresponding level for examination and verification.

The financial department of a government at any level shall， in examining and verifying the draft final accounts of all departments at the corresponding level， have the power to correct any inconformity with the provisions of the laws and administrative rules and regulations.

Article 62 The financial department under the State Council shall compile the draft of the central final accounts， and submit the draft to the State Council for examination and decision， and then the State Council shall submit it to the Standing Committee of the National People's Congress for examination and approval.

The financial department of a local government at or above the county level shall compile the draft final accounts at the corresponding level and submit the draft to the government at the corresponding level for examination and decision， and the government at the corresponding level shall submit it to the standing committee of the people's congress at the corresponding level for examination and approval.

The government of a township， nationality township or town shall compile the draft final accounts at its own level and submit the draft to the people's congress at that level for examination and approval.

Article 63 After the final accounts of the government at any level has been approved， the relevant financial department shall give an official written reply concerning the final accounts to all departments at the corresponding level.

Article 64 A local government at any level shall report its approved final accounts to the government at the next higher level for the record.

Article 65 In case a government at or above the county level judges that the final accounts submitted for the record by a government at the next lower level in accordance with the provisions of Article 63 of this Law contravene the laws or administrative rules and regulations or contain other inappropriatenesses and the resolution approving the final accounts has to be cancelled， the State Council and the local government at or above the county level shall submit the matter to the standing committee of the people's congress at the corresponding level for deliberation and decision； if a decision is made on its cancellation after deliberation， the standing committee of the people's congress at the said next lower level shall instruct the government at the corresponding level to recompile the draft final accounts in accordance with the provisions of this Law， and then submit the draft to the standing committee of the people's congress at the corresponding level for examination and approval.

Chapter IX Supervision

Article 66 The National People's Congress and its Standing Committee exercise supervision over the central and local budgets and final accounts.

A local people's congress at or above the county level and its standing committee exercise supervision over the budget and final accounts of the governments at the corresponding and lower levels.

The people's congress of a township， nationality township or town exercises supervision over the budget and final accounts of the government at the corresponding level.

Article 67 A people's congress at any level and the standing committee of the people's congress at or above the county level have the power to conduct investigations of major issues or specific questions concerning the budget or final accounts； governments， departments， units or individuals concerned shall truthfully report the situations and provide the necessary materials.

Article 68 When the people's congresses at various levels and the standing committees of the people's congresses at or above the county level are in session， deputies to the people's congresses or members of the standing committees may， in accordance with the procedures prescribed by law， raise questions or address inquiries concerning the budgets or final ac counts to the relevant governments or financial departments， which must promptly answer the questions or inquiries.

Article 69 A government at any level shall， at least twice within each budgetary year， make reports on the budget implementation to the people's congress at the corresponding level or its standing committee.

Article 70 A government at any level shall supervise the budget implementation by the governments at lower levels； A government at lower levels shall regularly make reports on the budget implementation to the government at the next higher level.

Article 7l The financial department of a government at any level shall be responsible for supervision over and inspection of the budget implementation by all departments at the corresponding level and their subordinate units， and shall make reports on the budget implementation to the government at the corresponding level and the financial department of the government at the next higher level.

Article 72 The auditing department of a government at any level shall exercise auditing supervision over the budget implementation and final accounts of all departments and units at the corresponding level and the governments at lower levels.

Chapter X Legal Responsibility

Article 73 Where a government at any level， without an approval afforded in accordance with the law， arbitrarily alters its budget， thus making total expenditures exceed total revenues in the original approved balanced budget or making an increase of the debts to be borrowed as compared with the original approved budget， the person in charge and other persons who are held directly responsible shall be investigated for administrative responsibility.

Article 74 In case the Treasury funds are arbitrarily drawn upon or the funds already put in the Treasury are appropriated by other means in violation of the provisions of the laws or administrative rules and regulations， the financial department of the government shall order the return or recovery of such funds to the Treasury， and the authorities at higher levels shall give administrative sanctions to the person in charge and other persons who are held directly responsible.

Article 75 In case budgetary revenues are concealed， or non budgetary expenditures are treated as budgetary expenditures， the government at the next higher level or the financial department of the government at the corresponding level shall order the correction of such acts and the authorities at higher levels shall give administrative sanctions to the person in charge and other persons who are held directly responsible.

Chapter XI Supplementary Provisions

Article 76 The people's governments at various levels， all departments and units shall strengthen the management of non-budgetary funds. Measures for the management of non-budgetary funds shall be fromulated separately by the State Council. People's Congresses at various levels shall strengthen supervision over the use of non-budgetary funds.

Article 77 The management of budgets in the national autonomous areas shall comply with the relevant provisions of the Law on Regional National Autonomy； In the absence of such stipulations in the Law on Regional National Autonomy， the relevant provisions of this Law and relevant regulations of the State Council shall apply.

Article 78 The State Council shall， in accordance with this law， formulate rules for its implementation.

Article 79 This Law shall go into effect as of January 1， 1995. On the same day， the Regulations on the Management of State Budget， promulgated on October 21， 1991 by the State Council， shall be invalidated.