It takes approximately 2 years from the time a subordinate unit budget is compiled to the time it is implemented. However, it is very common for changes in the state of domestic or foreign markets or the business environment during this period to require additional tasks, which frequently causes the content of the original budget to depart from the current circumstances. As a result, the original budget often is inadequate to meet those extra funding needs arising during the interim, and the subordinate unit must seek some way to avoid being restricted by the existing budget, which might hamper the unit's services and indirectly affect its operating performance. Article 88 of the Budget Act consequently specifies that, if there are major changes in the management environment or for normal operation needs, the implementation of a subordinate unit budget, may, with approval by the Executive Yuan, proceed in advance without being restricted by Articles 25 to 27 hereof. However, when it involves construction, improvement, expansion of fixed assets, capital reinvestment, sale of assets, raising of long-term debt and debt repayment, supplementary budget procedures shall be required. When a transaction from the Enterprise Fund is in excess of NT$300 million and NT$100 million for other Funds, the case shall be forwarded to the Legislative Yuan for their files and reference in order to respond to the foregoing service needs.
With regard to supplementary budget methods, prior to 1996 all enterprises first advanced the payments for various matters, and these payments were stated as provisional receipts, provisional payments, or uncompleted projects. Afterwards, following the completion of supplementary budget procedures, these items were finally stated as formal receipt, payment, fixed asset, and capital reinvestment items. The supplementary budget amount is directly added to the budget amount for the fiscal year, which can cause the financial statements for the years before and after to not comply with generally accepted accounting principles, and has attracted much external criticism. When the Legislative Yuan reviews a budget, it may submit a subsidiary resolutions, in which case implementing supplementary budget procedures will violate generally accepted accounting principles. It is therefore recommended that these situations be studied and improved. As a consequence, starting with the budget for the 1996 fiscal year, advance payments were made and tasks performed after actual implementation. In other words, the amounts are stated under appropriate items in the financial statement for the year in accordance with generally accepted accounting principles, and special explanation in the subordinate unit budget's "operating plan and budgetary summary (or explanation)" employed; the amounts are no longer entered into the budget for the supplementary budget year. With regard to the consolidated tables for subordinate unit budgets, an appended explanation is made of relevant consolidated tables or reference tables. Starting with the 1999 budget, in order to achieve further improvement, apart from providing special explanations in the "supplementary budget matters" section of each subordinate unit budget's "operating plan and budgetary summary (or explanation)," and including "itemized supplementary budget tables," detailed accounts and explanations are included in the supplementary budget items and content for each fund in the "analysis and explanation" items for the respective funds in the consolidated tables.
To ensure that the supplementary budgets of special funds are handled with sufficient rigor, apart from requiring that each fund not be included in the budget for the fiscal year, supplementary budget procedures in accordance with regulations are only allowed when needed due to major changes in the business environment or normal operating needs, and the competent authority has given its approval. In addition, in accordance with regulations, summaries of case of each enterprise fund amount exceeding NT$300 million and each non-profit special fund amount exceeding NT$100 million must be submitted to the Legislative Yuan for future reference in July and December of each year, and the Legislative Yuan may supervise supplementary budget procedures conducted by all enterprises.