How to Organize Nationwide Audit Projec under the Concept of Serving National Governance -- By CHEN BO and ZHANG XIAN from CNAO

A New Theory--National Audit Should Serve National Governance  National audit could serve national governance by:  Reflecting the implementation of relevant state policies  Addressing major illegalities and irregularities  Providing objective and reliable information

A New Theory--National Audit Should Serve National Governance  The effects:  Regulate the operation of power  Plug up loopholes in management  Safeguard economic and social order

A New Practice-- Nationwide Audit Project  The features of a nationwide audit project :  Cover the whole country  Assemble tens of thousands of auditors  Achieve excellent effects that regional project could not achieve

An Example--the Nationwide Social Security Funds Audit Project  Question 1:  Why we organized such a big audit project that covered the whole country?  What were the main objectives of the project?

Social Security System in China  Old-age insurance and medical insurance covering employees were established in the 1990s  Social relief systems for urban residents and rural residents were separately established at the year of 1997 and 2007  Social welfare systems for the elderly, children, and the disabled were promoted

Social Security System in China  By the year of 2011  622 million people were covered by old-age insurance  3.86 times the number of people covered in 2005  total surplus of old-age insurance funds stood at 2.01 trillion yuan ( about 314 billion U.S. dollars)  surged 4.52 times compared with that of 2005

Social Security System in China  People are quite concerned about:  What is the real effect of the social security system  Is it true that all the policies execute well all over the country  Is it possible that polices vary in practice among different regions  Does the social security fund safe and sustainable

The Nationwide Social Security Funds Audit Project in 2012  The 4 main objectives  Grasp the situation of the social security system  Reflect the major effects achieved during these years  Uncover the prominent problems or crucial issues  Put forward useful suggestions

An Example--the Nationwide Social Security Funds Audit Project  Question 2: How to do a good job in organization and management when we held such a large- scale audit project ?

Organization and Management  5 basic principles:  Unified organization and leadership  Unified work plan  Unified standards  Unified audit report  Unified release of audit results

 Unified organization and leadership  CNAO was the sole organizer and leadership  Audit institutions at lower levels acted in accordance with requirements made by those at higher levels Organization and Management

 Unified work plan  The audit work plan was issued by the General Office of the State Council  Unified Standards  Audit institutions at all levels must strictly obey unified standards to carry out audit implementation and put forward suggestions to punishment Organization and Management

 Unified audit report  The audit results were submitted to the State Council by CNAO  CNAO promulgated the reference framework for hierarchical reporting  CNAO provided guidance on how local audit institutions issue their audit reports Organization and Management

 Unified release of audit results  CNAO was the sole source of audit results  Audit results at each level shall be verified by audit institutions at the higher level before public release Organization and Management

Information Technology Application  Three steps to collect data:  Collect the original social security business data according to the indexes required by CNAO  Convert the original data according to the data structure and data types established by CNAO  Gather the data

Information Technology Application  The results of data collection:  18.8TB of standard data  78.5 billion of table records  Analization of social security business data  Horizontal communication of audit techniques between regions

Process Control  The counterpart contact mechanism  Liaison officers in CNAO contacted with provincial audit institutions  Provincial audit institutions reported their work progress every 10 days  Liaison officers in CNAO provided uninterrupted real time technical support and trouble shooting  Sent audit newsletters daily to audit teams

Process Control  The on-site research and guidance  Every leader of CNAO visited multiple audit sites and provided guidance  CNAO sent several teams to the audit fields to learn the situation and to correct the deviation and quality problems in time

Process Control  The control of data quality  A special calibration tool for audit teams to check data quality  Hundreds of check points were set for data integrity, accuracy and logic

Process Control  The three-stage data summary mode  Partial data test summary  Full data test summary  Formal data summary

Process Control  Partial data test summary  Obtained data forms from some areas to test data quality  Relatively easy to find data quality problems because of the small amount of data  Was helpful to the followed stage

Process Control  Full data test summary  Obtained data forms from the whole country  Checked the universal data quality problems and found out the solutions  Informed audit teams all over the country to correct the problems in time

Process Control  Formal data summary  A complete and detailed inspection to the data  Found out and corrected the problems in a timely manner

 Question 3: How to organize a more efficient and more effective nationwide audit project?

Set Up the Idea of Big Data Audit  Adhere to the principle of “Data First"  “Big Data" thinking, technology and methods  Let the data audit method play a leading role in audit implementation

Increase Daily knowledge Reserves and Do an Excellent Project Plan  The main factors for an excellent nationwide audit project plan :  The requirement of economic and social development  Audit resources  Knowledge reserves for a project

Increase Daily knowledge Reserves and Do an Excellent Project Plan  The efforts:  Auditors in CNAO should become experts in their corresponding fields  Departments of CNAO should timely put forward proposals of nationwide audit projects  CNAO should develop a long-term audit plan, and be ready to organize these projects

A Pilot Audit in Advance  The idiom of “dissecting a sparrow”  Carry out a pilot audit before the formal nationwide audit project

A Pilot Audit in Advance  Through the pilot audit, project organizers could:  Focus on the real situation of the field to be audited  Further confirm the audit content  Determine the key fields and key issues to be audited  Improve the audit plan  Find an effective way for a better organization and implementation

Other Measures  Pay special attention to the unity of organization and management  Give corresponding trainings to the auditors  Set up audit teams that could satisfy the requirements of the project  On-site research and audit newsletters  Establish direct communication

Thank you.