Before the outbreak of war, the Ministry had established auditing offices in the Provinces of Kiangsu, Chekiang, Hupeh, Shensi and Honan and in the city of Shanghai, and one sub-office for the Tientsin-Pukow Railway. The office of Shanghai concurrently took charge of the auditing affairs of the Nanking-Shanghai Railway; and that of Hupeh, the affairs of the Peiping-Hankow Railway. In 1938 the offices of Hunan, Kweichow and Szechwan were established. In July 1939, a conference of auditors was held in Chungking. All auditors sent out now returned to attend it. They reported on their work, assisted the auditors in the Ministry, and discussed with them the directions of war-time auditing. In October, Mr. Lin Yün-kai, the Minister of Audit, visited Szechwan, Shensi, Kansu, and Chinghai to inspect the audit work going on in Shensi and Szechwan and at the same time to examine the local financial conditions as a step toward the extension of the auditing system. In the spring of 1939, the Ministry prepared "An Outline for the Execution of War-time Audits" which was passed and enacted by the Supreme National Defense Council. There are eleven items, to be carried out in several periods, in this outline. A part of them are required by the New Auditing Act, while the rest are the new work arising from the war. They are as follows: _a._ Auditing prefectural [_hsien_] finance: A prefecture, on the authority of Dr. Sun Yat-sen's Constitution, is the unit of self-government; and whenever the self-government is accomplished, China becomes constitutional. This being the case, the prefectural finance actually concerns the future of the country and the people. Therefore, beginning from 1939, the Ministry introduced the auditing of prefectural finance. It ordered the provincial offices to have the prefectures make monthly reports on their revenue and expenditure. The reports should be submitted to the provincial auditing offices which will also send out delegates to scrutinize the accounting records of some selected prefectures as well as to investigate the prefectural financial organizations, the taxation system, and the sorts of taxes. Up to June 1940, there have been 84 prefectures selected for such investigation. _b._ The auditing of the Central Government Offices in the provinces and cities where no auditing offices have been established: In such cases, the Ministry has appointed the auditing offices of neighboring localities to take charge. But the Ministry has taken over the auditing affairs of Chungking for the moment. Meantime, plans have been made to establish auditing offices in Kwangsi, Fukien, etc. _c._ The auditing of the receipts and disbursements of public treasuries: Since October 1939, when the Public Treasury Act came into force, the Ministry has sent delegates to the State Treasury Bureau to scrutinize and indorse the accounting vouchers, and the provincial offices have sent delegates to Provincial Treasuries as well.