In 1998, a corruption case was uncovered in Jiaozuo government offices when teachers' salaries were delayed 18 months in Anyang City. Shen Xiangchen said: “The salary department was found to have kept over 1.2 million RMB for themselves, and the head was found to have embezzled 570,000 RMB.”
Jiaozuo City would conduct yearly inspections on finance and taxes in all administrative departments and institutions in line with requirements from the State Council from 1985 to 1997. Director Shen said: “I was in charge of the inspection. Cases of violations were around 30 percent in 1985, and it reached 52 percent in 1997, and the figure is soaring.” Hou Chenyi, vice mayor of Jiaozuo City of Henan Province, said: “We would stress time and again each year that private gold storage was forbidden, but to no avail.” The 56-year-old Hou Chenyi became vice mayor in charge of finance in 1995. Hou said: “The old regulations over finance were not feasible, with so many loopholes. The finance bureau was unable to take charge of the capital flow.”
Like many other cities, big or small, Jiaozuo has its own city sculpture. The galloping horse is meant to surpass the past and run toward the future. In 1997, the government finance bureau of Jiaozuo city met with difficulties that seemed unsurpassable under the old system. How then could the Jiaozuo people surpass their past in the following years?
At the end of 1998 and after half-a-year of research, the finance bureau submitted to the city government a 20,000-word survey, proposing that the city set up an accountant accreditation system. Shen Xiangchen said: “No department head could exchange money with his power with the accountant. Now there is no way to improve capital efficiency without the accountant. The accountant and money are one. We have a superb accounting system. No violation is possible if we carry out the system to the letter. In the past, accountants were among the working staff. They bent to the artificial person instead of the law. Why should they heed the finance bureau? What good would it bring to them if they obeyed the national law? While their leaders could give them higher pay or bonuses, or even help them solve their housing problem, but the law couldn't. It was closely related to their own interests.”
The accountant accreditation system the finance bureau proposed was to cancel the finance offices within each institution and accredit other outside accountants to replace their job. Hou Chenyi said: “This reform touched upon the interests of each department and institution, especially those of the principal leaders. They used to have the final say. Either the accountants or the cashiers were theirs; they could spend whatever money they'd like to. Now their financial power was canceled and the reform was sure to confront obstacles.”
A survey by the Finance Bureau caused a stir in the 250 administrative departments and institutions in Jiaozuo. Zhang Qinghe, director of Jiaozuo Labor and Social Security Bureau of Henan Province, said: “I was taken aback and felt it was too convenient. As a director, you have the free power to approve as to how to use financial capital in your department.” Director of Jiaozuo Education Bureau of Henan Province, Mu Yuhua said: “The old accounting system had little binding on the artificial person and the accountant was under his charge. Now the accountants are accredited, so that the artificial person is kind of deprived.” Tian Yi, director of Jiaozuo Science and Technology Bureau of Henan Province, said: “You have to pay if you want things done nowadays, even for those things you are not supposed to pay according to rules. The director may sign an "IOU" and then get things done in the past. But after the accounting officewas set up, the "IOU" doesn't work, and it is a bit harder for you to get things done.” Li Changgen, deputy director of Jiaozuo Public Security Bureau of Henan Province, said: “My first thought was that it was restraint on us. It is inconvenient and may affect our dealings with cases. I held lots of misgivings then.” Shen Xiangchen said again: “Most importantly, some people complained that the finance bureau had too much power and that we were reaching too far.” vice mayor of Jiaozuo City of Henan Province, Jia Wutang said: “I've been working in Jiaozuo for a long time and I was the director of finance then. And when I met with directors from other departments and institutions, they were all excessively polite, saying it was well done. I knew they were not telling the truth; they never talked with you even if there were problems. I felt a sense of crisis and something wrong. People were trying to estrange you.” Now vice mayor in charge of city construction and tourism, Jia was the director of finance in 1999. He said: “I was worried over the implementation of the reform; there were too many problems. And each department had its own different problems, and this may affect the decision-making of the department.”
In June of 1999, the city government issued the so-called "On the accountant accreditation system throughout the city". Half a year passed, and the system was not really put into effect. Mayor Jia said: “We had misgivings as well. On the one hand, we were afraid of failing and therefore affecting the overall arrangement and order of government work, because finance involves all aspects of government work. On the other hand, financial discord was related to the direct interests of each department; once the work was not done well, you would be resented.” Director Shen said: “I said at the time that it didn't matter if I was misunderstood and ruined. The reform must be carried forward, no turning back.”
In February of 2002, the then-mayor read the survey by the finance bureau and required that the system be carried out as soon as possible. This meant an official approval of the system. Qin Yuhai, former mayor of Jiaozuo City of Henan Province, said: “This reform was good for us to regulate and make good use of the financial capital in our city. The crux of the problem lies in the redistribution of interests. If it were revolution, it was the mayor, the standing mayor and the director of finance that were affected most, then came the principal leaders of other departments. They had to renounce some of the power in their hands, because that was not the right way to exercise their power.”
The accountant accreditation conference was held in city hall on March 3rd, 2000. The city government announced at the conference that 14 accounting offices directly under the finance bureau would be set up, and accountants would be accredited to replace those in all other departments. All accounts should be frozen and all capital retrieved for unified handling. That day was a Friday. Shen Xiangchen explained the reason they chose Friday: “We planned to hold the meeting on Wednesday. But the banks opened for business on Thursday and Friday. What if they all transferred their money to other places?”
As the leaders from all departments were walking out of the city conference hall, 78 accredited accountants selected through open examinations began to take over the financial affairs of the more than 200 administrative departments and institutions in the city. Accredited Accountant Liu Zisheng said: “The accountant of each department was asked to open the safe and make a check of the cash with the daily accounting records. He or she had to show all the accounts he or she had registered.”
Shen Xiangchen said: “I made one comment at the staff conference, that we should be aware that the reform was a readjustment of power and interests. Obstacles were coming from all sides. We had to endure humiliation in order to carry out this important task.” The take-over lasted more than two weeks. Accredited accountant Liu Zisheng said: “The original accounting system in all departments was not strictly implemented.” Shen Xiangchen also said: “It was out of our expectation. We knew there were problems but had no idea what. The figures were surprising. We later found 200 million RMB of idle and sunk capital, accounting for one-third of the city's total financial income.”
Teachers couldn't get timely pay on the one hand, while on the other one-third of the city’s capital remained idle. This strengthened the determination of Jiaozuo’s leading officials to carry out the reform. Vice mayor Hou Chenyi said: “The capital was not well-regulated; expenses were chaotic; administrative departments took up most of the financial capital and affected its overall efficiency.” But for this reform, it would be empty talk for the government to concentrate on economic development and fundamentally hold back corruption.
Starting from March 3, 2000, finance offices in 251 administrative departments and institutions in Jiaozuo city were replaced by 14 accountant offices, and 78 accredited accountants began to assume the job of the original 600-plus accountants in those departments. People were wondering whether this accountant accreditation system would really solve the problems, or how the redistribution of interest brought about by this reform would affect government finance.
Chi Jingmei has worked as an accountant in a government office for 12 years. Her identity began to change in 2000. He said: “The original accountant became a person to render accounts after the reform. All our accounts have gone to the accounting office. We have, in fact, become cashiers. In the past, we could handle some of those substandard invoices. But now that all the accounts have gone to the accounting office, substandard invoices are not allowed.”
The Number 2 accounting office is located in the government compound building and is in charge of the financial affairs of 32 administrative departments and institutions in this courtyard. All government departments in Jiaozuo have to undergone certain procedures rendering an account. The director in charge of each unit signs before the cashier submits the account to the accounting office. The accounting office has to double-check before the cashier gives the cash.
Shen Xiangchen said: “All irrational and substandard expenses are rejected. They can no longer spend as they'd like to and this fundamentally sets a limit. They are aware that the accountants are no longer theirs and restrain themselves when they are spending. Most of them wouldn't come and render accounts that are not in line with the rules.”
Editor:Wang Yin
(Dec 28th,2002)
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