Construction of the Financial Transparency System

Abstract: Financial transparency is essential feature of public finance is also important to achieve a democratic system of fiscal arrangements. Reform and opening up, China's improving fiscal transparency has taken a series of reform measures, and achieved some results, but the degree of transparency is still difficult to meet the requirements of the socialist market economy. Based on this, increase government transparency and efficiency of financial activities, has become the consensus of academic and government of the inevitable choice.

Keywords: fiscal transparency, financial Information: the system

Financial transparency is a democratic society the public right to Information and government Information disclosure system of the important pArt. Financial transparency mainly refers to the public government structure and functions of government, fiscal policy objectives, public sector accounts, financial planning and budget Information level. As China's market economy legal system and government management of strengthening the public on the fiscal balance, fiscal expenditure purposes, structure and effects, and more attention. to improve fiscal transparency, public accountability for strengthening the government, reduce the government agency costs, and reducing corruption, the establishment of efficient government, are of great significance. Report of the Seventeenth PArty Congress pointed out: "people are the masters is the essence and core of socialist politics." to protect the people's right to Information, pArticipation, expression rights and supervision, there must be an open, transparent finances.

Financial transparency is an aspect of sound financial management, financial transparency, but not an end in itself, it is to promote efficiency, protect the government and officials to take responsibility as a means. Fiscal transparency by the International Monetary Fund this (IMF), World Bank, OECD (OECD) and the great concern of many countries, academic institutions and Researchers also put it as macroEconomic stability, good governance and fiscal government is an important prerequisite for the fair. In the context of Economic globalization, the international community to worry about any rapid macroEconomic instability will have a negative impact on the world economy. To this end, IMF and OECD have developed the best criteria for fiscal transparency, fiscal transparency practices of States as a guide.


First, the theoretical analysis of fiscal transparency

The initial definition of fiscal transparency by George Kopits and JonD.Craig (1998) gives: maximum open to the public on the structure and functions of government, fiscal policy intentions, public sector accounts and financial projections of the information, and This information is reliable, detailed, timely, easily understood and can be compared, easy to voters and financial markets to estimate accurately the financial position of the government, the true costs of government activities and revenue. This is defined as the International Monetary Fund, the Financial Affairs prepared the <<Fiscal Transparency Manual (Revised Edition)>> adopted.


(A) Financial information is a special kind of public goods
The government finance statistics, financial analysis and forecast reports, which are all members of society have access to free public information goods. In the use, access to financial information is not exclusive, but compatible with each other, that is, Financial information products can be divided infinitely many times, but no matter how many times divided, is divided and the contents of all the financial information products will not be loss. quantity and quality of financial information products, and financial information products and the use of the purpose of the use of frequency independent This constitutes a financial information products as one of the foundations of public goods.

As a result of rational expectations: if the price is displayed at no cost to market pArticipants the information they need, then, there is no market pArticipants willing to invest in information systems. This means that no one wants to spend resources for the production of information, because the investment information system agents to receive a utility and non-utility investments, and no difference, these agents are able to observe the price system without the cost of access to information. when no one else to collect certain information, such information becomes extremely valuable. So, if you are the only agents to collect such information, then the environmental conditions to have access to this information on your strong stimulation, thereby changing the distribution of market information, which in turn stimulates other agents to collect the same information. indivisibility of the public nature of the information return re-constitute the financial information as a basis for public goods.


(B) the spirit of the contract fiscal transparency
Social contract theory holds that the state as a political entity that people enter into contracts, transferring the rights of all or part of their composition. The relationship between the public and the government is essentially a principal-agent relationship, the Government, as trustee has a duty to fulfill the public fiduciary duties assigned. In recent years, the amount of government spending around the world showed a rising trend, our government spending share of GDP, since 2002 more than 20%. fiscal expenditure expansion on the one hand means that the government entrusted with the responsibility expansion, but it also means that there are more inefficient government-run the hidden dangers. the public is the main provider of public financial resources, who have the power to monitor government use of public financial resources, the efficiency and effectiveness. but under the condition of incomplete contract, the Government between the public and the problem of information asymmetry, the government is the creation of public information and owners, the public is weak at the information. between the government and the public will make the game a strong public oversight and access to government action the motivation of public information. Therefore, to improve financial transparency, respect for the public right to know and supervise the voluntary performance of the social contract the government, strengthening public accountability and to achieve the legitimacy of contemporary government exists an effective way.


(C) of the Public Finance and Fiscal Transparency
Is the nature of public finance of public financial management and democratization. Public finance that is in accordance with the will of the people through democratic procedures, the use of democratic means to government financial management system. In short, is "set all of the Finance, Office of everybody's business. "transparency of government activities in the financial sustainability of the macroEconomic, good governance and the overall fairness of the financial an important prerequisite. to improve transparency of public finances can create a good environment, not only the foundation of democracy, governance is fundamental to achieve. public finances and a transparent financial, sun finance, it must ensure that taxpayers have sufficient financial activities at all levels of the right to information, thus effectively bound and can guide the financial departments at all levels of consciousness given by the people to exercise good terms of financial management, public and transparent body together to form a Union being implied in the public finances.


(D) symmetric information and financial transparency
Principal-agent theory, information asymmetry is caused by agency problems (adverse selection, moral hazard) roots. If the requirements of an agent for the interests of the principal act, the act requires agents should be transparent. Government as an agent of the people sometimes In order to cover up its policy failures of the concealed information has more power, and most citizens can not use the "opt out" option. to increase transparency can promote more accountable government officials, carry out public accountability, so that the public and the legislature more effective monitoring of and evaluation of the government. Therefore, fiscal transparency is the principal (citizens) reduce the agent (government) agency costs inherent requirement. Transparency is the perfect information and complete information to achieve the institutional arrangements, which shows that with a certain quality of the information is shared in all the main level. transparent system of information arrangements goal is completely symmetrical. information is completely symmetrical, including two meanings, namely, perfect information and perfect information. which is the meaning of perfect information game of all people involved in making the results of each act, benefit or loss of a clearer understanding of or clear expectations, imperfect information is the game the two sides in the game process can observe the behavior of other decision-making. Therefore, the transparency of financial information that the Government in the time prescribed frequency to the public disclosure of financial information level.


Second, the reality of the situation of Fiscal Transparency Study

Financial transparency is the transparency in the public domain extension. Since the 90s of last century, with accelerated development of Economic globalization, to improve financial transparency of public governance is not only the requirements of the Western developed countries, developing countries and economies in transition has become countries for the construction of normative order of market economy and achieve economic growth, the inevitable choice quality. In this context, many countries regard the public governance and government financial management focus to the transparency of public finances. our reference developed national experiences and practices, combined with China's actual situation, in improving fiscal transparency has taken a series of reform measures, to a certain extent, enhance fiscal transparency, reducing the "black box operation" phenomenon, but still higher than China's overall financial transparency low, there are many problems.


(A) Status of Fiscal Transparency
Fiscal Transparency from the traditional planned economy to a socialist market economy system evolution. Reform and opening up, China has adopted a centralized planned economic system, financial management, unified revenue and expenditure. In this case, financial performance of the "national distribution capabilities," in a sense, the financial activities in a "black box" state, public know little about the financial activities of the information, let alone participate in its decision-making process and the exercise of supervisory duties. reform and opening up , China began to gradually realize the transformation from planned economy to a market economy. With the independent operation of state-owned enterprise reform and decentralization of state power, the Government will not directly intervene in the production and operation, management and macro-control to indirect, accordingly, the state finance system has also conducted a series of progressive reforms. to promote the public finance reform as an important part of the process of strengthening financial transparency is mainly began in the late last century. Since 1996, the Audit Commission every year by the State Council entrusted to the National Congress report on the implementation of the central budget and other financial revenue and expenditure audit reports In 1996 the National Audit Office audit report submitted by the state budget for the implementation of the existing series of serious issues were revealed, involving the quality of public construction projects, social security funds and other misappropriation of misuse of special funds, budget "small treasuries", public expenditure and administrative waste, bureaucracy and corruption. The report makes the community more concerned about transparency in government finances. To this end, the NPC Standing Committee request the Central Government Since 2000, various ministries in the Government's overall budget, a separate report on his department budget. department budget for the proposed implementation of the system to promote fiscal transparency.

Recent years, with the overall construction of the public finance system, introduced a series of fiscal reform measures areas, especially the redefinition of the financial function, requiring fiscal revenue and expenditure structure and management transparency and standardization. Establish a market economy The public finance system to adapt to the specific details, including departmental budgets, centralized treasury revenue and expenditure, government procurement, performance evaluation, and reform of government activities in the light of international practice procedures, and regulate government behavior. Central People's Government website opening in late 2005 .2007 1 month, the State Council approved in principle <"Are Government Information Public>> to establish the national budget should be the most important government information content of .2008 in March, the Ministry of Finance released <<Ministry of Finance, Government Information Guide>>, provides for March 31 of each year to the public <<Ministry of Finance, the annual report disclosure of government information>>, which will help promote more open government information in China on May 1 .2008 formal implementation of the <"Are Government Information Disclosure Article side of the>> application provides citizens the right to information, but also provides information on public institutions at all levels of government responsibility and obligation to provide information. These practices are promoted from a different side of the process of fiscal transparency, reducing the "black box operation" phenomenon, but if the International Monetary Fund, dedicated to developing and transition countries to develop minimum standards for the implementation of standards for the inspection will be carried out in China in a global comparative perspective, we will find the overall transparency of the financial low, and lowest implementation the gap between the existence of more or less standard.

PricewaterhouseCoopers released in 2001, a report on "opaque Index" survey. The report of 35 countries (regions) for the survey, from corruption, legal, financial policies, accounting standards and practices, government regulation and other five aspects of the opaque index score and ranking. China's "opaque index" was 87, was listed as the least transparent country. In addition, the Shanghai University of Finance and Public Policy Research Center recently conducted a Research project on China's 31 provincial-level to rate and sort financial transparency, highlighting the problems of financial transparency. Task Force in 2006 selected financial accounts at the provincial level data for the survey, emphasis on the government funds, social security funds, state-owned enterprises fund a total of 113 three-part financial information . "budget accounts according to our information and accounting standards will continue to break down, from all parts of the financial information at all levels of study, to observe the financial transparency." survey results show that the information in the 113, the public can obtain information on average less than 25 items, Less than a quarter of the survey information. The study is examining the availability of financial information, did not address the normative information, reliability and timeliness, that is, even by the most basic standards, Fiscal transparency is very low.


(B) Problems of Fiscal Transparency
As mentioned earlier, the transparency of financial information, while the improved there are still many deficiencies. Generally speaking, the improvement of fiscal transparency in government functions mainly clear and standardized budgeting process is relatively rapid progress, and lack of mainly in the financial information transparent progress remains slow, but also difficult to meet the requirements of the socialist market economic system.

1, the scope of government information publication
Government to disclose the financial information is not comprehensive, public co-owned and managed the funds entrusted to the government in nature, it should include three categories: First, the Government for the public to provide public goods and services used by the funds, and second, for the protection of the Government basic living standards of members of society, the income redistribution of money the various social security funds, and third, production and business activities of government investment funds are occupied, the operating state-owned assets. Currently, the second and third category of funds information There is no system of government reporting system, the first type of fund, the Government only provides one part of the budget balance. oversimplified the budget report, the lack of budget revenues and expenditures and prior year comparative data, did not disclose the financial projections the basis of income and expenditure, but a brief focus on fiscal policy, the lack of specific targets and quantitative indicators describes the budget report, the disclosure of the debt indicator data is not complete, the integrity of the budget is not enough, the budget information does not reflect the whole picture of government financial funds. and published The information is usually the number of general lack of detailed information, not the composition of project expenditures and the specific arrangements made to determine whether appropriate.

2 time limit announced by the Government Information
Our annual budget is adopted in calendar year, while the National People's Congress in March of each year, which resulted in the annual budget consistent with the National People's Congress session. At all levels of government budget passed by the National People's Congress for approval, the actual reach of the budget unit under the time lag further, resulting in each budget year in China has no budget for a long time in the state of operation. As budget assignment late, so the beginning of funding is often not rational, leading to an additional adjustment of the budget implementation process frequently affected the seriousness of budget implementation. In addition, the public can keep abreast of the budget and final accounts, the deputies met only when the final accounts report that in just a few days will make a serious review period is difficult, and a large number of no information in the search for a long time afterwards.

3 Legal issues published by the Government Information
Once the budget to taxpayers on behalf of the public and public services provided by the Government's acceptance of the size and structure, the force of law. The nature of the responsibility of the budget law, the main responsibility, liability and the extent of legal liability , both in law or in the legislation did not clearly identify .2008 May, "" Are Government Information Public>> has been officially implemented, but due to our comprehensive legal system of open government information has not been established, the extent of government information There is also the limitations and scope, there are more open form, in essence, less open, more open principles, the specific content of less open, public participation and more passive, less active participation phenomenon. This is government establishment of a modern rule of law, protection of personal The purpose of basic human rights are still a wide gap.

4, published by the Government oversight of information
Although the NPC has the right to supervise the government budget, but more the supervision of a long stay in the legal form, is still a lack of a truly effective means of budget monitoring. The deputies of the budget was insufficient expertise, has become one of the budget review major obstacle. At the same time, the audit department as a result of lack of independence of supervision, the community is the lack of external oversight is even more necessary environment and conditions, little effect. Finance weak internal oversight and supervision mainly through spot checks and special much less daily supervision, after checking and more advance, the less supervision. from the whole financial supervision, system is not complete, lack of clear division of labor, department of their own way, buck-passing, which seriously affected the effectiveness of financial supervision and integrated effectively. Today there is no a complete and authoritative functions of financial supervision, the content and means to make special provisions of the law. Links http://www.hi138.com Research Papers Download Third, improve the Choice of Fiscal Transparency

With the integration of China into the world economy and the continuous improvement of the growing domestic market, improve the economy, improve the public finance system, increase government transparency and efficiency of financial activities, has become the consensus of academic and government of the inevitable choice.


(A) improve the governance structure: a "transparent" government
"Transparent" government is the government is obliged in appropriate cases, the public, except those involving objective reasons for the need for confidentiality of all information, citizens have the right to know all the information the government. First, a clear division of functions between the Government and the market. The Government's clear responsibility definition is "transparent" Government's priority requirements, including the various administrative departments, between government and market, between the government and other economic entities, the Government's responsibility. Secondly, a "people-oriented" service-oriented government. as the core of governance Financial transparency requires we follow the "scientific concept of development" of the logic to the fundamental interests of the public, building "a democratic and open, standardized and efficient" service-oriented government, through the transparency of the public and the Government to strengthen dialogue and exchanges between, and enhance public participation, to keep abreast of public opinion around the needs of the people determine the government objective, scientific decision-making and standardize administrative procedures. the people-oriented service-oriented government is to establish equality between the government and public relations, the public is no longer the passive recipients of government information, The Government is no longer the intention to control public behavior who, between the public and the government formed by principal-agent relationship, the government is mainly responsible for public accountability, governance targeting in the social value creation.


(B) improve the government budget system: a "transparent" budget
Public scrutiny the government budget is an important mechanism for financial activities, through the balance of payments adjustments to the size of the total supply and demand, by adjusting the structure of budgetary expenditures to achieve a reasonable economic development. The government budget transparency from the government budget is the preparation, implementation must be open to the accounts and transparent, placed authority supervision, public opinion and the general public under the supervision of the activities of the government budget to ensure the effectiveness, integrity, legitimacy and sustainability. the government budget information public, the public is not only a modern society right to know the requirements and the public involved in financial decision-making, monitoring the Government's financial activities, a prerequisite for good governance in government departments. disclosure has two ways: First, through the budget document submitted to the legislature, and second, by relating directly to the carrier publicly available information. In order to overcome the asymmetry of information, the public sector and the government, departments and financial departments, between departments and the public, between the government and the public should maintain a high degree of information transparency in order to overcome due to asymmetric information caused by improper arrangement of the human expenditure and expenditure inefficient consequences. Based on this, the budget should be focused on building an effective mechanism for information access and complete financial management information system.


(C) To enhance financial and legal system: the establishment of "transparency" rule of law
Public finances must be standardized, legal finance. And democratic financial management, is to increase the public's will for the will of the state, and national will embodied by laws and regulations in order to manage financial affairs according to law. Therefore, the establishment of sound financial law system is according to law, according to finance the foundation. and according to law, finance law on the premise that there are laws must be strictly enforced. Therefore, we must strengthen the financial and legal system, strengthening the legislation on public finances, improve longer meet the objectives of the current public finance laws, regulations and budget management, operational procedures, so that the fundamental behavior of the binding on the Government to form a transparent fiscal policy environment, and strict norms of financial and legal environment, increased government budget through the effective transparency, and ultimately achieve the purpose of improving the transparency of government work. The current, should earnestly implement the already enacted <"Are Government Information Public>> to strengthen institution-building around the information disclosure, improve service levels, to be really" open for the principle of not open to exceptions. "

(D) raising the level of financial supervision: a "transparent" monitoring
Government power is the public given by the exercise of the powers they need to resolve the taxpayer's tax, for which the Government must accept public scrutiny, which requires public finances must have a high degree of transparency. According to the inherent requirements of public finance, combined with the construction of the principle of transparency of financial supervision, China's financial supervision system should be established to "supervise the financial sector supervision by the NPC + + + social supervision audit external oversight," the all-round, sub-level "four in one" with the public both inside and outside governance. in the internal supervision, mainly monitoring the process of budget preparation and implementation of financial regulations, policies, systems implementation, monitoring of financial resources to run, according to fund additional procedures such as compliance, monitoring of financial institutions within the financial accounts of all units management. in the external supervision, on the one hand to strengthen auditing and supervision departments in order to avoid one-sidedness of a single body to monitor, and the results made public through publication or news media, the other, through publicity and education to improve citizen taxpayer awareness and legal awareness, and provide for their behavior as a tool for monitoring and channels, such as the creation of telephone complaints, held consultative meetings and other obligations of supervisors employed.


(E) strengthening the financial information technology to improve the technical means
Transparency of financial information and technology needs of the modern means of support. Take full advantage of modern technology, to establish a complete financial information system. In accordance with the Party Central Committee and State Council on deepening financial reform, establishing a socialist market economy system, the overall framework of public finance system requirements in early 2002, the State Council set up a "Golden Finance Project", and put it as a national e-government one of the twelve major projects. It will record every detail of each unit of money running a financial resources to effectively reduce the budget execution randomness, with a "before" fiscal control mechanisms "resource-type" management system. should be on this basis, the use of computer, communications and network technology, promote the construction and application of e-government system, the budget and external funding the Fund and all financial funds and the main macroeconomic indicators, the total accounting ledger, ledgers and other information into the information system, and built a relatively complete information base. increase automation, reduce human intervention areas, strengthen the implementation of monitoring to ensure that the funds security, information security, improve the efficiency of public finance activities, and transparency.


(F) Raising public awareness of democracy, give full play to the role of the media
Finance from the people, giving back to people, the public has the right to monitor whether the Government according to law, whether the protection of the legitimate rights and interests of the taxpayers. To raise public awareness of democracy is to strengthen the construction of the basic ways to financial transparency. The public has a high sense of democracy , will require more tax policy, public expenditure policy, terms of use of public funds to obtain the right to know, voice and supervision, which will promote financial transparency process. have a higher public awareness of democracy can also be more active participation in public decision-making. participants can effectively restrict the increase in interest group lobbying, making the government pay more attention to vulnerable groups in society, in the allocation of financial resources is more fair and reasonable. In addition, units should also be entrusted with the operation and use of fiscal The capital budget units to review the financial accounting statements, and the way to complete the audit report, units of the government budget through the budget of the public accountability of the implementation of activities to improve the normative acts of the executive. through various media, especially online report financial information to the public.


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