Abstract: Since fines must be all turned over to the state treasury and the operational funding of law enforcement is often unable to be well guaranteed. As a result, the department for Energy Administrative Law Enforcement (EALE) has low law enforcement zeal and also weakens the functions of administrative punishment. For the purpose raising law enforcement zeal and ensuring funding expenditure, the common practice returning fines pro rata and allocating money for individual case have some shortcomings which are unable to overcome. Looking for a legal and incentive mechanism that is able to overcome these shortcomings is the most pressing matter at the moment. Subsiding for law enforcement is a rational option. By taking the supervision on coal mines safety as an example, the operational mechanism of this method and strategy choice of EALE department and financial department are analyzed based on signaling game. It is found whether or not the subsidy mechanism is successful depends on the disguise cost of the EALE department, the probability that disguises are found, and the priori beliefs that the EALE department is identified as a law enforcement department by financial department. From a policy perspective, it should establish a written system for EALE subsidy. And the key of this system is to prevent the disguises from EALE department.

Key words: signaling game, subsidy, EALE, financial department