SOE official's expenses must be transparent

Updated: 2012-11-26 17:11


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The financial, supervision and audit authorities jointly issued an interim regulation aiming to boost supervision of officials' expenses in State-owned enterprises in the financial field.

Officials will have to keep expenses on cars and office decorations under certain amounts. When the companies are in the red or owe salaries to their employees for non-policy reasons, officials should not buy new cars or decorate their offices.

There have been several similar regulations issued by ministries and the State Council since 2009, which shows how difficult it is to supervise the officials’expenses. Officials’ salaries are transparent, but their expenses are largely a murky area. Officials of State-owned enterprises are a special group of entrepreneurs because of their backgrounds, just like their enterprises are.

In essence, they are government officials and paid by the taxpayer.

But their incomes are much higher than plain civil servants because of their entrepreneurial background. Yet, their performances as executives of the firms are sometimes much weaker than professional executives given the scales and profits of their companies.

This means that their expenses are much less transparent than their salaries, and this infamous gray area creates controversy.

Expenses can be divided in three layers. The first layer is necessary, the second is over consumption and the third is pure corruption, when officials use their jobs for private gains.

Improving expenses’ transparency and sticking to budgets are both feasible suggestions. Expenses must be incorporated into the government financial budget, which goes through meticulous evaluations and is under effective scrutiny and supervision of the people, media and disciplinary watchdogs.

Translated by Li Yang from China Business News