What is the understanding of reviewing the use of project funds?

Foreign loan project funds are mainly used for project construction, equipment and materials procurement, personnel training fees and expert service fees. Among them, foreign capital is mainly used for investment in fixed assets, purchasing imported equipment and materials, hiring foreign experts, training overseas personnel and other expenses that must be paid in foreign exchange; Domestic matching funds are mainly used for domestic expenses such as civil construction, resettlement in the project area, project management, and prepayment of project funds. You don't need to pay in foreign exchange. They are the main contents of project financial management and accounting. Examining the authenticity, legality and efficiency of the use of project funds is the core task of the audit of foreign loan and aid projects. The contents of the review mainly include the following aspects:

1. Project expenditure. The expenditure classification of foreign loan projects is quite special, usually divided into two categories. The first category is classified by domestic capital construction expenditure items, including projects under construction, other expenditures and assets delivered for use. Among them, "construction in progress" reflects the investment expenditure of construction and installation projects, equipment investment expenditure, deferred investment expenditure and other investment expenditure; "Other expenditures" refers to all expenditures except capital construction; "Assets delivered for use" reflects the actual total cost of all assets purchased and built at the end of the accounting period and delivered for use or carried forward after acceptance. According to this classification, the project schedule in the project financial report comprehensively reflects the use of project loans and domestic matching funds. The other category is the "approved appropriation" of project loans determined according to foreign loan project agreements, including civil engineering, equipment procurement, goods procurement, training and inspection, consulting services, etc. The "project loan withdrawal table" in the project financial report reflects the use of project loan funds according to this classification. Both categories record and reflect project expenditures, which have their internal relations and differences due to different accounting scopes. During the audit, it is necessary to check whether the expenditure is used for the purpose and scope stipulated in the project agreement, whether the supporting documents are compliant and complete, and whether the accounting treatment is in line with the relevant accounting system. At the same time, it is necessary to verify the connection between the expenditure items caused by the two classifications. Focus on checking the compliance and authenticity of contracts and settlement procedures, whether there are illegal subcontracting projects, or increasing the settlement amount; The authenticity and compliance of engineering labor service expenditure, material cost, indirect cost and deferred investment, and whether there is any situation such as expanding the scope of expenditure, raising expenditure standards, falsely reporting expenditure, miscalculating, etc.; Compliance of delivery procedures of completed projects, compliance and correctness of bidding, procurement, acceptance and accounting treatment of equipment and materials. Violation of rules and regulations, such as changing the use of foreign capital without authorization, bribery and fraud in bidding and procurement, should be punished according to law.

2. Physical assets. A considerable part of the funds of foreign loan projects are occupied in physical assets, including: foreign aid materials, various fixed assets delivered to production units after completion and acceptance, purchased equipment, materials and equipment, and securities purchased for dispatching funds. During the audit, it is necessary to check whether the expenditure is true, whether the valuation is correct, whether the accounting treatment is in compliance, whether the accounts are consistent, and whether the collection, distribution and accounting management of losses are complete. Unauthorized transfer, exchange and sale of imported equipment and materials, illegal trading of securities and other illegal acts should be investigated and dealt with according to law.

3. Prepayments and receivables (payables). This kind of fund income and expenditure is mainly reflected in prepaying materials, project funds and large-scale equipment funds, interest receivable from domestic and foreign loans (payable), commitment fees, capital occupation fees and other receivables (payable). For this kind of funds, we must first check whether it is true and whether the expenditure documents are compliant and complete. It is necessary to check whether the calculation of accrued foreign loan interest and commitment fee is correct and whether the principal and interest repayment is timely. For units that are in arrears in repayment of principal and interest, it is necessary to find out the reasons and promote repayment. It is necessary to focus on investigating and dealing with illegal acts of using such current accounts to transfer, misappropriate project funds or adjust project construction costs.