The Application of Key National Indicators to Social Security Audit in China

1. The Application of Key National Indicators to Social Security Audit in China Dr. Sun Baohou Deputy Auditor General National Audit Office of the People's Republic of China

2. I. China's Social Security System • Social Insurance: Pension, Health Care, Unemployment, Work Injury, and Maternity • Social Assistance: subsistence allowance, medical assistance • Social Welfare: benefits for children, handicapped, and aged people • Housing Support: affordable housing, low-rent apartment, and slum rebuilding

3. I. China's Social Security Audit • Target: Safeguard social security funds, improve social seurity system • Contents: Collection, management, and using of social security funds; social security policies' implementation

4. I. China's Social Security Audit In 2012, China's 18 social security funds audited. more than 40000 auditors involved. Findings: problems in the building of social security system; problems in business and funds administration Recommendations: Strengthen managment, improve and restructure systems

5. II. Defining Key Indicators for Social Security Audit in China The indicators commonly use: • social security expense to GDP ratio; • surplus of social security funds; • yields of social security funds; • pension replacement ratio, and etc.

6. Social security programs in China are administrated by the government departments of： • Human Resources and Social Security, • Civil Affairs, • Housing and Urban-Rural Development

7. Audit institutions in China focus on the implementation of social security policies, and the truthfulness, compliance and performance of the management and using of social security funds. The business index and data of social security are included in the scope of audit.

8. Key indicators defined: 1. Indicators for evaluating the implementation of social security policies; • ratio of social insurance coverage; • benefited population; • average benefits per month; • reimbursement ratio within basic medical care insurance; • subsidy for each medical treatment; • minimum living allowances ; • number of apartments under construction or constructed with governmental housing support; • number of families supported by governmental housing programs.

9. 2. Indicators on the sustainability of social security policies; • social insurance contribution base; • social insurance contribution ratio; • deficit of social security funds; • number of months that social security funds' balance could sustain benefits paying; • dependency ratio; • average retirement age, and etc.

10. 3.Indicators for evaluating social security funds management • amount of social security funds that are mis-used; • amount of illegal social benefit disbursement; • amount of social security funds obtained by deception or fraud; • annual return rate of social security funds, and etc.

11. 4.Indicators for evaluating social security business management • collection rate of social insurance funds; • unpaid rate of social insurance funds; • number of people who paid social insurance in duplicate; • amount of benefits withdrawn by the insured in duplicate, and etc.

12. III. Collection of Data for Social Security Audit Methods used to collect key indicators data: 1. Standardized data collection for specific audit projects; 2. Establish a routine and standardized data collection mechanism with the administrative departments of social security businesses

13. 1. Standardized data collection for specific audit projects; • identifies key indicators to be collected according to the audit content and priorities listed in the audit implementation plan. • audit teams in various regions will collect the data, make preliminary analysis, and submit the data to back office. • back office auditors then develop database programs to collectively analyze the data according to the characters of social security businesses, and require audit teams to carry out field verification consequently.

14. 2. Establish a routine and standardized data collection mechanism with the administrative departments of social security businesses Social securtiy administrative departments will submit pre-identified indicators and data in standardized format to audit institutions regularly. Consequently, audit institutions will designate special data analysis team to study the indicators and data.

15. With the above mentioned methods, the CNAO set up a social security data analysis model that combines routine back-office data analysis and audit field data analysis, which is conducive to establish digitalized audit methodology, featured with "general analysis, on-site verification, systemic study", and to improve the efficiency and effectiveness of social security audit.

16. IV. A Vision for Key Indicators Use in Social Security Audit • Indicators for social security policy evaluation will be highlighted. • Routine analysis and using of key indicators will be highlighted. • Ways of organizing social security audits will be greatly changed.

17. Thank you!