The Ministry of Finance ("MOF") has recently issued the Circular on Further Guaranteeing the Funds Needed for Prevention and Control of the Novel Coronavirus Pneumonia (COVID-19) Epidemic (the "Circular").
The Circular maps out arrangements in seven aspects, including setting clear goals for funding guarantee and making overall arrangements for fund budget. The Circular calls for ensuring sufficient funds needed by relevant departments for epidemic prevention and control and increasing the transfer payment to regions that are severely affected by the epidemic and faced with a relatively large funding gap. No local authorities may use the transfer payment funds offered from the higher-level finance for epidemic prevention and control to balance their own budget. The Circular expressly states that local departments of finance at all levels shall set aside sufficient funds to cover the expenditures that should be paid from the local finance; for those expenditures that should be paid from the central finance but need to be paid by local governments in advance, local departments of finance at all levels shall actively raise funds to guarantee the full amount of advance payments, and ensure effective basic work on fund settlement, such as establishing standing books and examining vouchers. Moreover, the Circular calls for efforts to tighten the whole-process regulation before, during and after the use of funds, and standardize the examination and approval procedures for funds, so as to make sure the funds will be used for the designated purposes, adding that no regions may withhold, occupy, embezzle or use for other purposes these funds, without approval.