'Audit storm' sweeps away graft
Zhu QiwenChina Daily  Updated: 2005-01-05 06:49

The past year has been a big 12 months for the nation's auditors.

And it is no coincidence that Auditor-General Li Jinhua was recognized as "the person of the year" by a number of China's most influential media at the end of 2004.

The praise lavished upon the boss shows the public's backing for the ongoing nationwide auditing campaign, for what it has already achieved and what it aims to do.

Li, head of the National Audit Office (NAO), had government departments and key State enterprises firmly in his sights when delivering his auditing report for 2003 to the Standing Committee of the National People's Congress (NPC), the country's top legislature, on June 23 last year.

Included in the report was a blacklist of government departments which abused and embezzled funds during the year 2003.

"Audit storm," a phrase Chinese media coined to describe the ongoing auditing campaign, has since frequently been seen in the headlines throughout the nation, as the NAO continued to publish its most up-to-date findings.

The width and depth of Li's report was impressive. It exposed the extent of corruption at the local level, as well as financial malpractice at 41 of 55 departments that are part of or linked to the central government.

In fact, ever since Li was prompted to his current position in 1998, he has been leading his staff on a crusade against the misappropriation of State funds by government departments and institutions.

It was reported that between 1998 and 2003, NAO audited 710,000 government offices and uncovered a total of 108 billion yuan (US$13 billion) in misused funds.

As the public finance watchdog, NAO has been enjoying more public support for its zealous exposure of corruption.

However, what distinguished the 2004 audit report from those previous was that it not only publicly named and shamed some wrongdoers, it led to prompt punishment.

Speaking before the members of the NPC, Li took on powerful ministries with concrete evidence and harsh criticism about their dereliction of duty.

Li has made no secret of his intention to go beyond simply exposing corruption.

With all-out support from the central authorities, NAO has shown itself to be a watchdog with a lot of guts and bite.

Last month, a former director of the Beijing Power Supply Bureau had to front court for alleged malfeasance, which was first disclosed by Li in his June report.

This was only the first to go before the court, however, among about two dozen alleged corruption cases exposed by NAO.

Showing the high regard the NAO is held in, the State Council - the Chinese cabinet - submitted a special report to the Standing Committee of the National People's Congress, a couple of weeks ago to show what had been done to rectify the problems exposed by Li.

According to the special report, 754 officials had been penalized or detained after auditors found they had misused government money.

By the end of October, in the wake of an NAO investigation into the 2003 budget, the treasury had reclaimed more than 70 per cent of the 28.6 billion yuan (US$3.46 billion) that the watchdog revealed was being illegally kept by various government organs.

Given all that NAO has managed to accomplish, it would be fairly apt to recognize 2004 as a year of auditing.

However, the significance of the "audit storm" goes far beyond the contribution NAO made in pushing anti-corruption.

Stricter auditing has highlighted and reduced losses from the misuse and misappropriation of budgetary funds, while being a warning to all related institutions.

Such efforts are needed to maintain sound public finances.

In face of his growing popularity among the public, the "iron-faced" auditor-general had played down his personal role in the national campaign by stressing the support received from the public and China's top authorities.

It may sound like modesty, but it actually says a lot for the truth.

Stamping out corruption is a challenge for any country that undergoes fast and vast social and economic changes, as is the case in China nowadays.

As the country accelerated its integration into the world economy following its 2001 World Trade Organization entry, increasingly fierce foreign competition has become an immense challenge for both Chinese enterprises and policy-makers.

Yet, domestic reforms are all the more demanding given the country's massive and far-reaching transition from central planning to market competition.

On the one hand, the country is pressing ahead with the strategical restructuring of the State sector. After more than two decades of trial and error, property right reform has taken centre stage during the recent reforms of State-owned enterprises.

On the other hand, the Chinese Government is redefining its function while allowing the market to play an increasing role to raise the overall efficiency of the economy.

But lack of related rules to ensure transparency and fairness during these underlying changes have created problems.

Admittedly, it will take time to put all of those laws and regulations into place. But before that can happen, strengthened auditing will be needed to check all sorts of wrongdoings within the public sector or with public finances.

Strong grassroot and top-echelon support for the auditing campaign in 2004 manifested a national consensus on the need to better regulate China's course of reform.

The public's growing demand for more detailed auditing information has both heartened and obliged Li and his staff.

When Li brought violations by government departments and key enterprises to light, some people were busy making excuses and saying Li had put a negative slant on the country's growth.

But by throwing their weight behind NAO, the central authorities had explicitly rejected such conceptions.

Sound and transparent public finances are crucial to the pursuit of sustainable and balanced economic development.

Last year's report was a much-needed measure to plug the loopholes in current State funding supervision.

In the absence of a complete set of legal and administrative measures to scrutinize and regulate misconduct by government bodies, it is unlikely that NAO alone can address all of the problems it exposed.

But it has not stopped the country's anti-corruption drive, with NAO directing its fire at new targets now.

It recently announced that the scope of auditing would be extended to include medium-ranking officials.

It seems the popularity of Li and his staff will soon be on the wane.

But the popular "audit storm" will only blow harder across the country. 

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