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Integrated Financial and Procurement Audits for Bank Financed Projects - The China Experience

Jingrong He's picture
Supreme Audit Institutions (SAI) for Bank financed projects have carried out financial and procurement audits. In Poland, this initially started more than a decade ago and there have been several other examples over the past years in other countries.

By the end of FY16, China National Audit Office (CNAO), the SAI in China, had successfully completed its third year of integrated financial and procurement audits for 27 Bank financed projects and accounting for 28% of the total active portfolio of China. This is a big leap from only 3 projects in the first year of FY14.

Rome was not built in a day. CNAO has been the external auditor of all Bank-financed projects in China since 1984. It conducts project audits in accordance with the Government Auditing Standards of the P.R. China and the International Standards on Auditing. The Foreign Funds Application Audit Department and the Audit Service Center of CNAO, and the Provincial Audit Institutions conduct audits on Bank financed projects and issue the audit reports in their names. There are about 120-130 financial audit reports submitted to the Bank every year. CNAO's audit reports not only include the auditor's opinion on project financial statements, they also include opinions on procurement compliance as this is an important aspect of the review of the eligibility of expenditures. This procedure is in full compliance with the Audit Law of P. R. China, which requires auditing of authenticity, legality and beneficial results of the budgetary revenues and expenditures or financial revenues and expenditures of public funds. It was under this context that in FY 14, we started piloting the use of CNAO for integrated financial and procurement audits in some Bank-financed projects.

Tackling drug-resistant infections a priority

Tim Evans's picture
This Op-Ed originally appeared in the China Daily, USA.
A technician carries out a blood test for HIV virus at Jinan AIDS lab in East China's
Shandong province on Nov 30, 2015. [Photo/IC]

While the last half century has seen major advances in global health, new challenges are now threatening these hard-won health gains. One of these is antimicrobial resistance (AMR), or drug-resistant infections which can no longer be treated by antibiotics and other antimicrobial drugs. AMR is on the increase globally both in humans and animals.

Ending Poverty in China: Small projects bring big benefits

Sitie Wang's picture
This blog is part of a series produced to commemorate End Poverty Day (October 17), focusing on China – which has contributed more than any other country to global poverty reduction – and its efforts to end extreme poverty by 2020. Read the blog series here. 
 

An example of how private corporations can help end poverty in China: Alibaba and the “Internet + Poverty Reduction”

Ruidong Zhang's picture
This blog is part of a series produced to commemorate End Poverty Day (October 17), focusing on China – which has contributed more than any other country to global poverty reduction – and its efforts to end extreme poverty by 2020. Read the blog series here. 

Following a 2009 earthquake in Qingchuan County, Sichuan Province, Alibaba introduced the “Internet + Poverty Reduction” model, with the core concept to boost economic development in the affected areas with a business model that empowers people to move out of poverty using the Internet.

Alibaba announced its rural e-commerce strategy in October 2014, with a plan to invest RMB100 million (about $14.8 million) over the next three to five years in the development of local e-commerce service systems for 1,000 counties with 100,000 villages.

The program provides valuable services in three areas:
  1. Easy and affordable access to goods and services in poor areas including: delivery of consumer goods to rural areas and farm produce to cities, mobile phone recharge, utility bills payment, booking airline and train tickets, making hotel reservations, as well as microfinance, online medical consultation, and online learning;
  2. Provision of ecosystem support for sustainable rural development, including raising awareness about the Internet among local officials, building the capacity of local firms to use the Internet for business, Internet skills training for young people and farmers; and
  3. Infrastructure development for the new economy, including logistics infrastructure, payment systems, financial services, cloud computing and data collection. 
By mid-2016, Alibaba’s Rural Taobao Program established “Internet+” service systems in 18,000 villages in 400 counties (including about 200 poorest counties) in 29 provinces, and recruited more than 20,000 Taobao partners and helpers. In July, Rural Taobao launched its service-based 3.0 model, upgrading partners to rural service providers and village service stations to local service centers, business incubators and public-benefit cultural centers.
Alibaba’s “Internet + Poverty Reduction” features a number of innovations including e-commerce, job creation, access to finance, tourism development, education and healthcare.

Ending Poverty in China: How NGOs can play a role

Wenkui Liu's picture
This blog is part of a series produced to commemorate End Poverty Day (October 17), focusing on China – which has contributed more than any other country to global poverty reduction – and its efforts to end extreme poverty by 2020. Read the blog series here. 
 
China has 128,000 poor villages with 55.75 million registered poor people. There is no one-size-fits-all solution to lift them out of poverty. Typically, people fall into four categories of poverty, requiring different approaches. Unlike some development players, NGOs are more agile and are innovative in solutions, allowing them to provide support sooner.

The first category comprises those who are temporarily incapable of work due to illness or having school-aged children to support. For these people, rehabilitation or bringing back their capability to work to will help reduce their vulnerabilities.

The second category consists of those who have some resources but lack business skills or efficiency. Working with them to develop new business models and use resources more efficiently will help them get out of poverty.

The third category is made up of those who are capable of work but external conditions or resources like jobs are poor. Relocation or employment skills training may be effective solutions.

The fourth category comprises those who are permanently incapacitated, such as the severely disabled. They should be supported by the social protection system.   
  

A tale of twin demographics: Youth in cities

Nicole Goldin's picture
60% of urban populations will be under the age of 18 by 2030.  How can we harness youth potential as a growth engine for cities? Photo: Arne Hoel/ World Bank

This week thousands of policy-makers, experts, NGOs and urban-minded citizens of all stripes are convening in Quito, Ecuador to discuss the New Urban Agenda at Habitat III – a significant global convening that occurs every 20 years. And, in a couple weeks, amid the costumes and candy, ghosts and goblins of Halloween, the world will mark UN World Cities Day on October 31st. For good reason, youth are part of the conversation.  In today’s global landscape, two demographic patterns should stand out:  rapid urbanization and large youth populations.  These patterns are especially robust across developing nations.  Already the worlds’ cities host half of its citizens, and Asia and Africa are expected to account for 90% of urban growth. While growing, cities have also become younger – many of the world’s nearly four billion people under the age of 30 live in urban areas, and according to UN-HABITAT, it is estimated that 60% of urban populations will be under the age of 18 by 2030.

Ending poverty in China: What explains great poverty reduction and a simultaneous increase in inequality in rural areas?

Guobao Wu's picture
This blog is part of a series produced to commemorate End Poverty Day (October 17), focusing on China – which has contributed more than any other country to global poverty reduction – and its efforts to end extreme poverty by 2030. Read this blog series.
 
Reducing poverty and inequality are two important socioeconomic policy objectives for most countries. While some can kill two birds with one stone, others may achieve either or none of these. In China’s special case, poverty reduction goes together with an increase in income inequality for at least the past 20 years. Here, I address some of  the underling factors in this mismatched trajectory.
 
For quite a long time, economic growth, increase in income inequality and reduction of poverty concurred in China. Since 1980, the country has made remarkable progress in reducing poverty. The head count ratio of poverty by the official poverty line, which is about 21% higher than the line that is set at USD 1.9 per day (2011 PPP), has been reduced by 94% from 1980 to 2015 in rural China (figure 1).
 
In contrast, the Gini coefficient of income distribution among rural residents in China rose from 0.241 in 1980 to 0.39 in 2011 or by 62% according to the official estimation, though it once declined between 1980 and 1985 and was said to decline slightly after 2012.

Figure 1: Change in Poverty head count ratio and Gini coefficient in rural China since 1980
Sources: China National Bureau of Statistics (2015), Poverty Monitoring Report of Rural China, China Statistics Press; the data for poverty by USD 1.9 per day is from PovcalNet: the online tool for poverty measurement developed by the Development Research Group of the World Bank.

As the Paris Agreement becomes reality: How to transform economies through carbon pricing

Laura Tuck's picture


The remarkable pace at which nations of the world have ratified the Paris Agreement on climate change gives us all hope. It signals the world is ready to take the actions we need to keep global warming below 1.5 degrees Celsius. We know, however, that delivering on Paris comes with a high price tag, and that we need to help countries not just transition toward renewable energy but unlock the finance needed to get there.

Amid the enormous challenge ahead, I want to emphasize the transformative economic opportunity that putting a price on carbon pollution presents.

Ending poverty in China: A 20-year perspective from staff in the frontlines

Alan Piazza's picture
This blog is part of a series produced to commemorate End Poverty Day (October 17), focusing on China – which has contributed more than any other country to global poverty reduction – and its efforts to end extreme poverty by 2020. Read the blog series here.
 
Since the beginnings of the rural economic reform process in 1978, China has played the lead role in the global effort to overcome absolute poverty. The World Bank has, since 1981, assisted China both in the country’s extraordinary overall economic growth and its tremendously successful poverty reduction program.
 
It has been a great pleasure and privilege to have worked with China’s Leading Group Office for Poverty Reduction (LGOP) since 1990 in their highly successful poverty reduction program. I have seen first-hand the complete elimination of the worst aspects of absolute poverty throughout all of China’s poorest areas. I have hiked into hundreds of poor villages throughout the uplands of western China, where in the 1990s it was common to find villages where many households had not achieved basic food security and most households and children experienced malnutrition, where most school age children would not complete elementary school and where there was no local access to basic health care. Homes lacked road access, drinking water, and other basic infrastructure. 
Alan with kids on the project site, Photo: Alan Piazza

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