Daqing Zhonglan has strengthened plan management to control various costs and expenditure. Its efforts have produced positive results. The company’s budget stood at 168.81 million yuan ($27.5 million) for the first half of the year, and real costs reached 152.5 million yuan, saving 16.31 million yuan or 9.66 percent.
The company finished breaking down costs for 2014 after many discussions and modifications since October 2013. It issued an official document of the result. There were a total of 120 cost items for 2014 assigned to 12 departments for strict management. The cost plan included basic construction and technical renovation costs in 2014.
The company has taken a four-level review and approval system to control expenditures outside budget. Leadership and heads of the mechanical operation and planning departments, as well as company officials, will review applications to control unbudgeted costs while ensuring production and management needs. In addition, the company strengthened cost tracking and supervision and clarified individual responsibilities for overall plans. It shifted focus from postmortem analysis to ex ante forecasting and in-process control. It also conducted performance evaluation of grassroots units and employees in accordance with an economic responsibility system and costs evaluation methods to urge all departments to bring down costs and improve operation quality. At the same time, the production and management expenditure will strictly adhere to plans. Unauthorized purchase requests will not be handled by the purchase department, and unauthorized expenditures will not be reimbursed by the accounting department.
According to incomplete statistics, Daqing Zhonglan’s actual expenditure costs took up 33.01 percent of the annual budget, saving 16.31 million yuan year-on-year, excluding project construction, technical renovation, overhaul and equipment upgrading.