CHINA'S top auditor said that 9.1 billion yuan (US$1.1 billion) was misused by 38 central government departments last year, Xinhua News Agency reported June 29.
The figure represented 6 per cent of all the funds put under audit, Li Jinghua, auditor-general of China's National Audit Office, said in Beijing on June 28 when delivering a report on the performance of the central budget in 2004 and audit of other fiscal revenues and expenditures to the Standing Committee of the National People's Congress.
Auditors found that 12 departments obtained from the central government an extra of 491 million yuan (US$59 million) in budgeted funds through such malpractices as adding fictitious people to payrolls, submitting nonexistent projects and randomly raising budget standards.
Li said that 26 departments misappropriated funds totalling 1.07 billion yuan (US$129 million) and 14 others transferred financial funds totalling 935 million yuan (US$113 million) to their subordinate departments or other relevant organizations.
Other malpractices, according to Li, included putting away funds in "small accounts" and misuse of funds earmarked for special projects.
Some government departments even diverted funds originally budgeted for special projects to building homes and offices, he added. He gave as an example the State Sports General Administration (SSGA) which was revealed in last year's audit report to be using a part of the Olympics funds to build dormitory building for its own staff.
Instead of checking its behaviour, SSGA was found to have new problems this year - overpaying its two lottery centres through budgeted fund and then secretly sharing among themselves huge sums of illegal profits.
The report also mentioned the State Reserve Administration. By August last year, the administration had reserve materials totalling 1.4 billion yuan (US$169 million) that had been borrowed before 1994 but not returned. Also by the end of 2004, China had appropriated 266 million yuan (US$32 million) in reserve funds for the purchase of Chinese medicinal herbs, 227 million yuan (US$27 million) of which was either missing or misappropriated.
Problems were also found with the business operations of four major government-owned asset management companies: China Huarong, China Great Wall, China Orient and China Cinda asset management corporations.
The four asset management companies were set up by regulators to clear up some 1.4 trillion yuan (US$170 billion) in bad loans held by China's four biggest State banks.
Li gained fame from his tough and outspoken auditing policy. His last year's report, which was referred to by media as an "audit storm", caused 762 officials to be charged or receive administrative punishment. (Star-Xinhua)
