construction_projects.docVIP

TRAINING MATERIAL AUDIT STANDARD ON AUDIT OF STATE PROJECTS INTRODUCTION Audit of state projects refers to supervision audits covering the truthfulness, compliance and effectiveness of revenues and expenditures of fixed asset investment projects. Because fixed asset investment projects usually involve long construction periods and major expenditures with a large number of participating units as well as inputs and outputs completed at different stages, audits are conducted of budgetary (estimate) implementation of the projects and the final accounts of completed projects. Audit of budgetary (estimate) implementation Audits of budget implementation of fixed asset investment projects are conducted for the periods between the commencement of investment in the construction projects and the preparation of final accounts at the completion of projects. Since this period is of fairly long duration, the selection of audit frequency and timing can be flexible. These audits cover a wide and interesting variety of topics including the following major aspects: Audit of fund utilization at the early stage of projects Usually investment activities have taken place prior to the commencement of investment projects. Some medium to large scale projects require large investments to succeed in early-stage preparation. Audits at the early stages focus on: Whether appropriation of land used for construction is made in the approved amount; Whether appropriation of land is in compliance with requirements of the approved development plans; Whether expenses for demolishing and removal related to appropriation of land are properly managed; Whether preliminary construction works such as roads, electricity and water are completed according to the design requirements with expenses thereof paid in accordance with relevant stipulations. Sources and utilization of project funds Since fixed asset investment projects require large inputs and are continuous in their construction periods, once cons