Delay in Budget Implementation

Since the middle of last year, Dalian Changhai Credit Guarantee Corporation has been waiting for interest payment from the state treasury.

The accumulated 15-month interest payment arose from secured loans arranged by the government to promote the reemployment of laid-off workers. The interest is subsidized by the government but the disbursement of funds is seriously delayed.

In another case, Beijing Language University obtained a 4.5 million yuan subsidy from the Ministry of Education in 2002. The money is meant for paying interest on a loan to fund the university's canteen renovation.

However, the planned project has yet to move beyond the structural design stage and no loan has been taken, leaving the fund made available has stayed idle for the last four years.

"Why should the treasury provide funding if it's not needed" says Zhu Zhigang, deputy director of Ministry of Finance, at a budget implementation management workshop.

Zhu says that science and technology, healthcare, environmental conservation, and public interest agencies performed worst in executing budget expenditures.

He believes the problem stems from poor implementation and glut of funds.

The ministry suspects that some central agencies had in the past exaggerated funding needs by submitting poorly studied projects and unrealistic plans, which cannot be accomplished after funding approval.

In 2006, agencies under the central government have a combined budget surplus of 57.4 billion yuan, of which, 53.7 billion yuan is actually meant for projects' expenditure.

By the end of 2006, the total surplus for of all central agencies rose by 10% on a year-on-year basis, and in some agencies, up to half of the balance made up of unused funds.