On-site inspection operational procedures of financing guarantee agency in Liaoning Province

 

Firstly: General Provisions 

 

(1) In order to regulate on-site inspection, to improve the audit of work quality and efficiency, according to relevant laws and regulations of (the Interim Measures for the Administration on financing guarantee company), ( Interim Measures for the Administration of Liaoning Province financing guarantee agency), the procedures are formulated...

(2) This procedure is applicable for the Liaoning provincial government finance office, municipalities finance office (commissions, bureaus), Suizhong County Finance Office (hereinafter referred to as the "regulatory authorities") to do the  general and special on-site inspection on the financing guarantee agency  under their jurisdiction.

(3) The financing guarantee agency mentioned in the procedures refers to the financing guarantee agency and their branches which setup and already obtains the financing guarantee business license with in Liaoning provinces area.

(4) The procedures referred to in the on-site inspection including check preparation, check the implementation of inspection reports and processing, check the file finishing four stages.

(5) The implementation of on-site inspection, the inspection team should follow the law, the principle of fairness and efficiency.

(6) During the on-site inspection, the inspectors need to comply with the self-discipline; faithful performance of their duties requirements, to comply with the confidentiality provisions shall not seek improper interest in the on-site inspection.

(7) The inspector who abuse of power, corruption, bribery, favoritism, dereliction of duty, will be given administrative sanctions within personnel management authority; a crime is constituted, criminal responsibility shall be investigated by the judiciary; cause harm to citizens, legal persons and other organizations, shall give compensation in accordance with the law.

 

Secondly:  Inspection Preparation Phase

 

(1) Initiate a Project

Regulatory authorities can make on-site inspection work plan according to the annual or make temporary on-site inspection on financing guarantee agency according to actual needs. Inspection program, on-site inspection should be developed to determine the time of the on-site inspection and inspection of key projects. Before an on-site inspection is carried out , municipality’s regulatory department should report the on-site inspection program to the provincial government finance office for the record.

(2) The establishment of the Inspection Team

1. Confirm the inspector. Regulatory authorities according to the inspection task to assign the inspectors, to establish the inspection group, to determine the inspection team leader and members. Inspection group should include at least two inspectors; ensure there is an appropriate review and supervision for pall inspection items.

When necessary, the use of the professionals from accounting firms, law firms to assist in the inspection. Professionals hired from outside do not have the independent eligibility to conduct on-site inspection, and the legal consequences of the entrusted on-site inspection work to be borne by the regulatory authorities, but external hired professionals is responsible for the truth and of the work,. External hired professionals must get the approval by the main leadership of the regulatory.

2. The job responsibilities of the inspection team leader. The inspection team leader is responsible for leading the inspection team and the organization and implementation of on-site inspection work, to  control the quality and progress of the inspection work, to adjust the inspection man power and time according to the inspection progress, and to reflect the discovered significant clues or issues during on-site inspection process to their respective supervisory departments timely, to organize to write “on-site inspection report’s and other relevant regulatory documents and take the overall responsibility of on-site inspection discipline.

3. The inspection team members' work responsibilities. The inspection team members should be subject to the work arrangement of the inspection team leader, in strict accordance with the on-site inspection procedures and requirements to carry out on-site inspection. Seriously write "on-site inspection work draft” and other inspection document, to do the forensic work, responsible for the authenticity of the issues found during the site inspection.

(3) Information collection and research

Before the inspection, the inspection team should conscientiously study the financing guarantee agency’s on-site inspection materials and make an analysis of the checked institutions, when necessary, may take institutions self-examination, questionnaires, relevant departments and agencies discussion talk to get the information of the checked agencies, to make a preliminary judgment on the matters that need to be inspected during the on-site inspection.

(4) On-site inspection preparation meeting

Before the inspection, the inspection team should organize the members to convene an on-site inspection preparation meeting. The meeting contents should include:

(1) Introduction of the basic situation and the previous inspection of the inspection bodies;

(2) To study and discuss the collected information of the checked agencies and decide on the specific steps and methods of carrying out the inspection;

(3) To learn the relevant laws and regulations, financial, accounting, legal knowledge, inspection methods and techniques, that relate to the inspection program;

(4) Other circumstances.

(5) Issued a notice of on-site inspection (on-site inspection document format 1)

1. Before the inspection, the inspection team should draw a notice of on-site inspection, then report to the regulatory department leadership for approval and to stamp seal of the regulatory authorities.

2. The inspection team should deliver the notice of on-site inspection to the checked institutions before carry out inspections.

3. The checked institutions should fill in the (delivery receipt) (on-site inspection instrument format with the signature of the received people, after received the notice on the site inspection.

 

Thirdly, The Inspection Implementation Phase

 

(1) Presence

The inspection team should visit the checked institution to implement on-site inspection according to the time specified in "on-site inspection notice”.

1. Show that the identity and the intent of inspection

During the on-site inspection, the inspection team should show” on-site inspection notice” to the checked institutions, introduces the inspection team members, and the inspectors should show their work certificates.

(2) Talks on site

The people participating in the talks are the main responsible inspectors and the main responsible of checked institutions, and the responsible person from relevant department. The inspection team should inform checked institutions the inspection’s purpose, scope, content, manner, time and the checked institutions’ right and obligation, and raise the requirements for the checked institutions to cooperate with the inspection work; checked institutions in respect of basic conditions and self-inspection reports and report data to do special report; both sides should identify specific liaison officers.

(2) Inspection of the implementation program

1. Access to information

Inspection team can, according to the inspection need, query, forward and save, copy the checked the bodies’ relevant information of the original documents, contracts, business and financial statistical reports; query the data in computer business systems of checked institutions, and to process the data’s exporting, , printing, copying, and so on.

Inspectors fill in the "on-site inspection data query list" (on-site inspection instrument format 3) in duplication, signed by the inspector and the corresponding responsible person of the checked institutions, and obtaining the files mentioned in the list. After use, should promptly return it and mark the return date and signed by both sides.

2. On-site audit or investigation

on-site audit of the inspection team includes: understanding the basic conditions of the checked institutions, internal systems, business place and business license publicity and so on; and review the business and financial information related to inspection items; audit the consistency between the accounts, between the accounts and accounts table, between the accounts and the physical situation; query the external audit reports and internal audit reports; make a on-site inspection on the actual operating conditions.

Inspection methods, including: sampling, check, review, calculation, comparative analysis, account analysis, flow charts, on-site observation, investigation and inquiry etc.

Inspection type, including: census and sampling.

3. Investigation and evidence collection

Need to obtain sufficient evidence for problems that require investigation and evidence collection and the facts need to be approved by the checked institutions. The supporting materials include: investigation and inquiry transcripts (on-site inspection instrument format 4), vouchers, statements, books of account (page), questionnaire, explanation material, the checked institutions’ documents, contracts, minutes of meetings, the redeployment of reply, in-kind photos, etc. The above evidence in the case of copies needed, shall be stamprd with the official seal of the checked institution page by page and marked "consistent with the original”, if there are special circumstances ,cannot sign or seal , the inspection team leader shall send a written explanation.

Make investigation and evidence collection for the problems found during the inspection, should fill in the (on-site inspection and evidence collection records) (on-site inspection instrument format 5) and attach the supporting materials.  (On-site inspection and evidence collection records) and the supporting materials needed to be signed by at least two people from both sides, the inspection team and the checked institution. At the end of the inspection, the inspection team need to make a unified summary of the evidence materials of the inspection, fill in the ( on-site inspection and evidence collection list) (on-site inspection instrument format 6), signed and centralized management by the inspection team leader.

4. To produce and fill in working papers

“On-site inspection working papers "(on-site inspection instrument format 7) is an important basis for the inspectors and inspection records, which should include: being inspected institution name; the inspection items name and inspection time; check the verified facts and their sources, results of calculation and analysis; evidence; the signature and the date of inspection personnel.

The working papers can be recorded according to “one matter, one paper”; also can be in accordance with the consolidated records of inspection items. The opinions expressed in the working papers must be clear, with the necessary supporting materials; the inspector shall be responsible for the authenticity of working papers, the inspection team leader carry out the necessary checks and guidance to the working papers.

5. Fill in the on-site inspection the fact confirmation paper

The inspection team leader, on the basis of understanding all the on-site inspection work and review all the (on-site inspection work papers), to determine the facts have been checked and confirmed and signed by the checked institutions, according to the inspectors’ (on-site inspection working papers) to compile the "on-site inspection fact confirmation paper ) (on-site inspection instrument format 8), the fact confirmation paper only record the facts, not to make any qualitative evaluation, after signed by the inspection team leader one by one, it will be delivered to the legal representative or main responsible person to check, to make the confirmation and sign or stamp the official seal.

If the attached materials for the facts can be confimed that the facts are indeed correct , but without the checked institutions’ confirmation and signature, the inspection team may archive the forensics original material, in order to avoid the originals are tampered or destroyed by the checked institutions. If the attached materials for the facts confirmation paper cannot fully prove that the facts are indeed, and the defense reason from the checked institutions is reasonable, the inspection team should mark "the defense is recognized, does not consider it as a problem" and record.

6. Form to inspection facts and evaluation

When the checked institutions complete the confirmation of the facts of the inspection and fill in facts of inspection confirmation paper, the inspection team should make a comprehensive analysis, verification, summary for the basic situation and the facts and issues of the inspection, then make the analysis, evaluation for the facts of the inspection, to make it into a formation of  " inspection facts and Evaluation (on-site inspection instrument format 9).

7 On-site inspection conclusion talks

When the "inspection facts and evaluation” is completed, the inspection team should organize a summary talk with the checked institution. The talk shall be chaired by the inspection team leader, the main responsible person and relevant business department responsible person should be involved. the (inspection facts and evaluation ) is read by the inspection team leader in the talk, the checked institutions can raise the opinions on relevant issues and the authenticity, accuracy of the facts and evaluation , if necessary, to exchange opinions on relevant issues.

If the checked institution have no objection on the (inspection facts and evaluation), the main responsible person from the checked institution need to write no objection comments on it and sign or stamp official seal; if the checked institution has any objection, should feedback the written comments to inspection team set by the inspection team. The inspection team should review the objection from the checked institution and accept its reasonable opinions. If no feedback within the stipulated time, it will be considered that no objection from the checked institution.

Meeting minutes keeper should be designated in the talk, and make a  on-site inspection talk minutes (on-site inspection instrument format 10). If due to some special reasons, the talk cannot be arranged, the inspection team should send the written (inspection facts and evaluation)to the checked institution, the checked institution should feedback the written comments to inspection team set by the inspection team, If no feedback within the stipulated time, it will be considered that no objection from the checked institution.

8. Finish the on-site inspection

The inspection team finishes on-site inspection by predetermined time principally. If need to extend, they should report to regulatory department for approval. When inspection Team confirmed the leaving time, need to inform the checked institution about it, return the acticles borrowed from the checked institution. If necessary to re-visit, need to inform the checked institution in advance.

During the whole inspection process, the inspection team leader shall make guidance and supervision for the inspection work, timely understand the inspection work conditions, and control the quality and progress of the work, to find out if there is any error and omission, to solve all problems in the inspection, to supervise inspectors to collect and examine the evidence, check the progress of the inspection work and timely adjust the man power, to make sure the inspection work can meet the requirements of the purpose of inspection.

 

 

Fourthly, The Inspection Report and Processing Phase

 

(1) Complete the on-site inspection report (on-site inspection instrument format 11)

When the on-site inspection is finished, the inspection team should fully absorb with reasonable opinion from the checked institution, according to the summary of the talk and the written feedback on the (inspection facts and evaluation)from the checked institution, to adjust and perfect the ( inspection facts and evaluation), and make a (on-site inspection report) on the basis of it. The inspection team leader is responsible for writing (on-site inspection report)

(On-site inspection report) should include the implementation of the inspection and the basic situation of the checked institution; the found issues, the facts and the evaluation; in accordance with the provisions of the laws, regulations and relevant regulations, to propose the handling comments, and the initial rectification and regulatory requirements.

(2) Make(on- site inspection suggestions) (on-site inspection instrument format 12)

The inspection team should report( on-site inspection report) to their respective regulatory authorities, if any major issues, shall convene a meeting to make a group decision or timely report to high level leadership and department, and ultimately make handling suggestions for on- site inspection of the regulatory department and fill in the (on-site inspection suggestions )

2 (on-site inspection suggestions) is the specialized documents that the inspection authorities give the inspection facts, evaluation, proposed corrective action or suggestions decision to the checked institution.

Inspection team is responsible for the drafting of the( on-site inspection suggestions) and report to the inspection authority to review, after it is approved, send it to the checked institution. The checked institution fills in the ( delivery receipt) with the signature of recipient (on-site inspection instrument format 2) after receiving the ( on-site inspection suggestions )

3. The contents of the( on-site inspection suggestions) include:

(1) The problems found during inspection and their evaluation and judgment.

(2) The rectification suggestion and the due date of rectification.

(3) Requirements for the checked institution to submit the rectification program in a written report to regulatory authorities within a certain period since receiving (on-site inspection suggestions), and report progress of the rectification program in phases or one-time in a written report to regulatory authorities.

(3) Rectification progress tracking

Regulatory authorities should be based on rectification suggestions and due date of the rectification in the (on site inspection suggestions), and rectification solution submitted by the checked institution, to timely tracking the conditions of the rectification, including action, progress and the results of the rectification.

Regulatory authorities shall reflect the rectification conditions into the risk rating, evaluation and annual monitoring report, to study and determine the next step in the regulatory program, if necessary, put forward the proposal of the further regulatory measures.

 

Fifthly, On-site Iinspection Instruments

(1) The provincial government finance office unifies the format for on-site inspection instruments. The regulatory authorities are responsible for the on-site inspection instruments printing, coding, and distributing work. The inspectors are required to fill in the on-site inspection instrument, prohibit the unauthorized painting and modify.

(2) When the inspection is finished, the regulatory authorities shall make the inspection files in accordance with the relevant provisions, to archive and record for future reference.

The principle of inspection files is “one case, one volume”, the files should include the volume Paper, catalogue, all on-site inspection instruments and related information. Archives should be   sort, binded, coded by instrument order. The inspection carried out through the computer, the computer document sorting, and copy, compressed on the disc together kept with the archive files

 

Sixthly, Supplementary Provisions

 

(1) In special circumstances, need to make a temporary inspection to the checked institution, may be appropriate to adjust the inspection procedures, without prior notice to the checked institution, but the inspection team shall show the "on-site inspection notice” and related documents when arrive at the checked institutions.

(2) When the regulatory authorities need to joint other departments, institutions to setup the inspection team, inspection procedures and the content can refer to this provision, to ensure the inspection is compliance with the law, coordination and cooperation and information sharing during the inspection process,

(3) Of this regulation by the provincial government finance office is responsible for the interpretation.

(4) The regulations issued since the date of promulgation.