Financial Acceptance Procedures for Major Science and Technology Projects (Topics) under the Civilian Sector

　　Caijiao [2011] No. 287

　　Chapter 1 General Provisions

　　Article 1: In order to ensure the scientific rigor, fairness, and standardization of the financial acceptance process for major science and technology projects (hereinafter referred to as "major projects") under the Civilian Science and Technology Program, and in accordance with the "Interim Measures for the Management of Funds for Major Science and Technology Projects under the Civilian Science and Technology Program" (Caijiao [2009] No. 218), the "Interim Measures for the Management of Administrative Expenses for Major Science and Technology Projects under the Civilian Science and Technology Program" (Caijiao [2010] No. 673), the "Interim Provisions for the Management of National Major Science and Technology Projects" (Guokefajiji [2008] No. 453), and relevant national financial and accounting management systems, these Measures are hereby formulated.

　　Article 2: Financial acceptance of major special projects (topics) is one of the prerequisites for the acceptance of such projects (topics). Organizing financial acceptance aims to objectively evaluate the overall use of funds allocated to major special projects, further enhance the efficiency of these funds, and better facilitate the smooth implementation of these major special projects.

　　Article 3: All projects (topics) approved for inclusion in the management of major special programs shall undergo financial acceptance. The financial acceptance of a project (topic) and its overall acceptance shall be jointly planned and carried out concurrently, with completion within six months after the deadline specified in the task contract. If a project cannot be completed on schedule, an application for extension of the acceptance period must be submitted, clearly stating the reasons for the extension and the proposed extended duration, and filed with the Ministry of Finance. The extension period generally shall not exceed one year.

　　Article 4: Major special projects shall undergo financial acceptance based on individual projects (topics) as the basic unit. If a project (topic) is divided into different management levels, the leading organization of each major special project (hereinafter referred to as the "leading unit") may organize financial acceptance at different levels according to the specific organizational and management arrangements of the project.

　　Article 5: Financial acceptance shall be based on the relevant national financial and accounting regulations as well as the budgets approved by the fiscal authorities for major special projects (research topics). The scope of funds subject to financial acceptance includes all funds managed under the budget for major special projects, encompassing central government funds, local government funds, funds raised independently by the institutions themselves, and funds obtained from other sources.

　　Chapter 2: Organizational Management of Financial Acceptance

　　Article 6: The Ministry of Finance shall centrally organize and guide the financial acceptance of projects (research topics) under major special programs, and shall be responsible for supervising and inspecting the financial acceptance process. In accordance with relevant regulations on government procurement, the Ministry shall organize and designate accounting firms. Based on applicable regulations, the Ministry shall conduct spot checks on the financial acceptance work and results carried out by the leading organizations.

　　Article 7: The leading unit is responsible for the organizational and managerial tasks related to the financial acceptance of the corresponding major special projects (topics). The financial department of the leading unit, in collaboration with the Special Implementation Management Office, shall specifically be responsible for organizing the financial acceptance process. The acceptance process may be carried out either by forming a financial acceptance expert panel or by entrusting professional institutions such as accounting firms in accordance with regulations.

　　Article 8: The financial acceptance expert panel and the entrusted professional agency shall each conduct financial acceptance work independently, objectively, and impartially in accordance with the contractual requirements, and shall issue financial acceptance opinions and acceptance reports based on the content and acceptance criteria for financial acceptance.

　　Article 9: The financial acceptance personnel shall include financial experts, technical experts, and others. In principle, the financial acceptance expert panel shall have no fewer than 7 members, among whom at least 5 must be financial experts. The head of the expert panel shall be a financial expert.

　　Article 10: The entity undertaking the project (or research topic) shall, as required, promptly submit the financial acceptance application report and relevant supporting documents, and actively cooperate with the expert panel to complete the financial acceptance procedures. For projects (or research topics) jointly undertaken by multiple entities, the relevant participating entities shall actively cooperate with the primary undertaking entity in performing the aforementioned tasks.

　　Article 11: A recusal system shall be implemented. Personnel from the entities undertaking or participating in major special projects (topics), as well as their collaborating institutions, may not serve as acceptance experts in the acceptance process involving their own organizations.

　　Chapter 3: Methods and Content of Financial Acceptance

　　Article 12: Financial acceptance shall be conducted through on-site acceptance, off-site acceptance, or a combination of both. The leading unit may determine the acceptance method based on specific circumstances.

　　(1) On-site acceptance: This primarily involves visiting the site of the project (or research topic) undertaking unit, examining accounting vouchers and related financial documents, listening to relevant briefings on-site, and then formulating financial acceptance opinions for the project (or research topic).

　　(2) Non-site acceptance: Financial acceptance is primarily conducted through non-site methods such as listening to reports, reviewing documentation, and conducting consultations, thereby forming financial acceptance opinions for the project (subject). If it is indeed necessary to verify relevant materials on-site at the project (subject) location, experts may be organized to visit the site and review the pertinent documentation.

　　Article 13: The main contents of financial acceptance include: implementation of the financial management system, status of funds being in place and properly utilized, accounting practices and financial information, compliance and effectiveness of expenditure items, budget execution, and asset management.

　　Article 14: The implementation of the financial management system primarily includes the following aspects: the execution of relevant national systems pertaining to budget management, fund management, contract management, government procurement, approval and reimbursement procedures, asset management, as well as related internal control systems.

　　Article 15: The status of funds being in place and implemented primarily includes: the availability and implementation of central government financial funds, local government financial funds, funds raised by the institutions themselves, and funds obtained from other sources; as well as the disbursement of funds to the entities undertaking the tasks in accordance with the approved budget and the requirements specified in the contract task descriptions.

　　Article 16: The status of accounting and financial information primarily includes: the establishment of special accounts and separate accounting for funds allocated under major special programs in accordance with relevant regulations; the standardization and accuracy of accounting practices; the authenticity of financial information; and the management of accounting archives.

　　Article 17: The compliance and effectiveness of expenditure items primarily include: adherence to the scope and standards of expenditures stipulated by the national financial and fiscal systems as well as regulations governing the management of major special funds; the relevance of expenditures to their intended objectives, conformity with policies, and economic rationality; and the effectiveness of fund utilization.

　　Article 18: The status of budget execution primarily includes: compliance with financial budget management regulations, the implementation of budgets according to contractual obligations and project (subject) progress, adjustments to budgets made in accordance with prescribed procedures and authorities, and the balance of various types of funds.

　　Article 19: The asset management status primarily includes: asset acquisition, asset recording, asset usage and disposal procedures, the status of open sharing, and the management of intangible assets, among other aspects.

　　Article 20: During the financial acceptance process, if any of the eight circumstances specified in Article 39 of the Interim Measures for the Management of Major Special Funds for Science and Technology under Civil Administration (Cai Jiao [2009] No. 218) are found, the entity shall be required to make rectifications within a specified time limit before proceeding with the financial acceptance.

　　Article 21: The financial acceptance evaluation shall adopt a combination of qualitative and quantitative approaches. Based on the prescribed acceptance contents, acceptance indicators, corresponding evaluation criteria, and scoring system (detailed financial acceptance indicators are provided in Appendix 2), a comprehensive financial acceptance score shall be calculated. At the same time, corrective recommendations shall be made regarding any identified issues.

　　Chapter 4: Financial Acceptance Procedures

　　Article 22: The leading unit shall, based on the completion status of specific tasks and the overall work plan, and taking into account the specific characteristics of the special project, develop a financial acceptance work plan for the special project (research topic) and submit it to the Ministry of Finance for filing.

　　The leading unit shall issue a notice to the project (subject) undertaking unit, based on the financial acceptance work plan, to proceed with the financial acceptance.

　　Article 23: The entity undertaking the project (or sub-project) shall, within 30 days after completion of the task and on the basis of carefully settling accounts and preparing a report on the financial execution of the project (or sub-project), submit to the leading unit the financial acceptance documents, which shall primarily include:

　　(1) Project (subject) contract, budget, and other relevant approval documents;

　　(2) Report on the Financial Revenue and Expenditure Implementation of the Project (Subject) (see Appendix 1 for report content and format);

　　(3) Explanation of the remaining funds for the project (research topic);

　　(4) Other materials that need to be provided.

　　The acceptance documents and materials for the project (subject) must be stamped with the official seal of the unit undertaking the project (subject). The unit undertaking the project (subject) shall be responsible for the authenticity, accuracy, and completeness of the provided acceptance documents and related data.

　　Article 24: After receiving the financial acceptance materials, the leading unit shall promptly conduct a formal review. For projects (topics) that pass the formal review, an accounting firm shall be selected from among those designated by the Ministry of Finance to carry out the financial audit.

　　Article 25: Upon completion of the financial audit, the accounting firm shall promptly issue a financial audit report. The financial audit report serves as an important basis for financial acceptance.

　　The leading unit shall respond to the entity undertaking the project (or research topic). For projects that pass the financial audit without issues, the leading unit shall promptly organize the financial acceptance process. For projects that have problems identified during the financial audit, the leading unit shall promptly notify the entity undertaking the project (or research topic) to make necessary rectifications; financial acceptance will proceed only after the rectifications have been completed.

　　Article 26: During the financial acceptance of a project (or research topic), each expert shall, on the basis of carefully studying and comprehending the relevant policies and institutional requirements and gaining a thorough understanding of the project’s (or research topic’s) specific circumstances, independently complete and submit the expert opinion on financial acceptance (see Appendix 3 for details). The overall conclusion on financial acceptance must be discussed and approved by all acceptance experts. The leader of the acceptance expert panel shall organize the completion of the expert panel’s opinion on financial acceptance (see Appendix 4 for details) and sign it personally.

　　Article 27: Based on the compilation and analysis of financial acceptance opinions for projects (topics), the leading unit shall preliminarily formulate financial acceptance conclusions and issue these conclusions to the units undertaking the projects (topics).

　　Article 28: For projects (topics) identified as requiring corrective actions, the implementing entity shall, within one month of receiving the financial acceptance conclusion, complete the required corrections in accordance with the stipulations of the financial acceptance conclusion and submit a written report on the corrective measures to the leading entity. Projects that have fully implemented the required corrections will pass financial acceptance; those that have not fully implemented the corrections will fail financial acceptance.

　　Article 29: The leading unit shall compile the financial acceptance opinions and relevant materials after rectification, formulate the final financial acceptance conclusion, and prepare the financial acceptance report (see Appendix 5 for the report’s content and format), then submit it to the Ministry of Finance. The Ministry of Finance will conduct supervision and inspection of the financial acceptance process, content, quality, and acceptance conclusions through random checks.

　　Article 30: The financial acceptance of classified projects (research topics) shall be carried out strictly in accordance with relevant regulations, including the "Law of the People's Republic of China on the Protection of State Secrets," the "Regulations on the Confidentiality of Science and Technology," and the "Regulations on Confidentiality for Implementing Major Science and Technology Special Projects." The leading unit, in consultation with the Ministry of Finance, shall organize and implement this process separately.

　　Chapter 5: Financial Acceptance Results and Related Responsibilities

　　Article 31: The financial acceptance conclusions for major special projects are categorized into two types: “Passes Acceptance” and “Fails Acceptance.”

　　The total score for the project (subject) is 100 points. A comprehensive score of 80 points or above (including 80 points) is considered “passed acceptance”; a comprehensive score below 80 points is considered “not passed acceptance.” Among these, projects (subjects) with a comprehensive score between 60 points (including 60 points) and 80 points shall be handled in accordance with Article 28 of these Regulations.

　　Article 32: Within one month after the acceptance of a project (subject), the entity responsible for each project (subject) shall complete the financial closing procedures. Any remaining funds from the project (subject) budget shall be handled in accordance with relevant financial and fiscal regulations.

　　Article 33: With regard to issues identified during spot checks for financial acceptance, the leading unit and the project implementing unit shall promptly carry out rectifications and submit the rectification results to the Ministry of Finance. Based on the rectification status and the opinions of the expert panel, the Ministry of Finance will adjust the acceptance conclusion and take appropriate actions as prescribed.

　　Article 34: For projects (topics) that fail to apply for acceptance upon expiration without justifiable reasons or that do not pass acceptance, the project (topic) leader shall be prohibited from applying for major special projects (topics) again, and the entity undertaking the project (topic) shall be prohibited from applying for major special projects (topics) again within five years.

　　Article 35: During the financial acceptance process, if any acts of falsification, misappropriation, diversion, or encroachment upon major special funds are discovered, the relevant persons and entities shall be held accountable in accordance with applicable regulations. If such acts are suspected of constituting a crime, the case shall be referred to the judicial authorities for criminal prosecution in accordance with the law.

　　Article 36: During the financial acceptance process, if members of the acceptance expert panel, personnel from professional institutions such as accounting firms, relevant management personnel, and related organizations engage in acts of falsification, favoritism, or corruption, their qualifications to participate in the financial acceptance work for major special projects shall be terminated or revoked. Any violation of national laws and regulations shall be dealt with in accordance with applicable laws and regulations.

　　Chapter VI Supplementary Provisions

　　Article 37: Each leading unit may, in accordance with these Measures and taking into account the specific characteristics of the special project, formulate detailed implementation rules for the financial acceptance management of corresponding projects (research topics) and submit them to the Ministry of Finance for filing.

　　Article 38: The expenses required for the financial acceptance organized by the project (subject) undertaking unit shall be covered from the indirect costs of its project (subject) funds; the expenses required for the financial acceptance organized by the leading unit shall be covered from the leading unit’s administrative fees; and the expenses required for the financial acceptance organized by the Ministry of Finance shall be covered from the administrative fees managed by the three departments. The content and standards for expenditure of these funds shall be strictly in accordance with the “Interim Measures for the Management of Major Special Funds for Science and Technology in Civilian Sectors” (Caijiao [2009] No. 218) and the “Interim Measures for the Management of Administrative Expenses for Major Special Projects in Science and Technology in Civilian Sectors” (Caijiao [2010] No. 673).

　　Article 39: This Regulation shall be interpreted by the Ministry of Finance and shall take effect from the date of its promulgation.

　　(Source of information: Website of the Ministry of Finance of China)