Legal basis: Article 64 of the Organic Law of People's Republic of China (PRC) Local People's Congresses and Local People's Governments at All Levels, local people's governments at all levels shall set up necessary working departments according to the needs of their work and the principle of being capable.
Local people's governments at or above the county level shall establish audit institutions. Local audit institutions at all levels independently exercise their power of audit supervision according to law and are responsible to the people's government at the same level and the audit institutions at the next higher level.
The establishment, increase, decrease or merger of departments such as departments, bureaus and committees of the people's governments of provinces, autonomous regions and municipalities directly under the Central Government shall be reported by the people's governments at the corresponding levels to the State Council for approval and to the Standing Committee of the people's congresses at the corresponding levels for the record.
The establishment, increase, decrease or merger of bureaus, departments and other departments of the people's governments of autonomous prefectures, counties, autonomous counties, cities and municipal districts shall be reported to the people's government at the next higher level for approval and to the Standing Committee of the people's congress at the corresponding level for the record.