Auditors find 9.06 billion yuan in misappropriated funds
(Xinhua)
Updated: 2005-06-29 00:27

China's National Audit Office (NAO) found misuse of funds totaling 9.06 billion yuan (about 110 million US dollars) in 38 government departments in 2004.

NAO auditor-general Li Jinghua delivers a report to the Standing Committee of the National People's Congress in Beijing on June 28, 2005. [Xinhua]

The figure represented six percent of all the funds put under audit, NAO auditor-general Li Jinghua said Tuesday when delivering a report on the performance of the central budget in 2004 and audit work of other fiscal revenues and expenditures to the Standing Committee of the National People's Congress, China's top legislator.

Auditors found that 12 departments obtained from the central government an extra of 491 million yuan (59 million dollars) in budgeted funds through such malpractices as adding more people to payrolls, submitting nonexistent projects and randomly raising budget standards.

Li said that 26 departments misappropriated financial funds totaling 1.07 billion yuan (129 million dollars) and 14 others transferred financial funds totaling 935 million yuan (113 million dollars) to their subordinate departments or other relevant organizations.

Other malpractice, according to Li, include putting away funds in "small exchequer" and misuse of funds earmarked for special projects.

Some government departments even diverted funds originally budgeted for special projects into building homes and offices, he added.

By August of last year, the State Reserves Administration had reserve materials totaling 1.4 billion yuan (169 million dollars) that had been borrowed out before 1994 but not returned, according to the report.

And also by the end of 2004, China had appropriated 266 million yuan (32 million dollars) in reserve funds for the purchase of Chinese medicinal herbs, 227 million yuan (27 million dollars) of which was either missing or misappropriated.

Ten SOEs lose 14.5 billion yuan for bad policy-making

An economic responsibility audit of 10 state companies found a loss of 14.5 billion yuan caused by their bad policy-making. The report on the central budget implementation in 2004 was submitted to the ongoing session of the Standing Committee of the National People's Congress (NPC) from June 26 to July 1.

The NAO launched an economic responsibility audit of bosses of the 10 state companies with a total asset of 1422.1 billion yuan in 2004. Five of them were found fabricating profits of 4.6 billion yuan while the other five hid profits of three billion yuan, according to the audit report.

The 10 companies had a total loss of 14.5 billion yuan due to irregularities in policy-making and business operations. In addition, the illegal disposal of state assets also resulted in a 2-billion-yuan loss, said the report.

The audit also found nine clues of economic crimes among the 10 companies involving 1.6 billion yuan, said the report.

Four major financial assets management companies to be targeted

An audit of the big four in 2004 found rampant irregularities in their business operations, said a report submitted by the National Audit Office to the session.

The audit covered 554.4 billion yuan of non-performing assets disposed of by the four companies, accounting for 39 percent of the total. The irregularities involved 71.549 billion yuan, about 13 percent of the total audited assets.

By the end of March, China's four major financial assets management companies had retrieved 140.89 billion yuan (17.1 billion US dollars) in cash, or one fifth of the total disposed non-performing assets, drawn from the country's four major state- owned banks, according to the figures released by the China Banking Regulatory Commission (CBRC).

The audit attributed the result to illegal procedures, falsification, little transparency, interference from local officials and individual embezzlement.

To improve the performance of the four companies, which were formed mainly to help state-owned banks to deal with their non- performing assets, the NPC Financial and Economic Committee Tuesday appealed to the legislature for a comprehensive audit on those companies.

The top legislature has a right to ask the central government to report on the use of central budget, and the auditor has a legal right to audit any organization sponsored by public budget.

The four companies -- China Huarong Asset Management Corp., China Great Wall Asset Management Corp., China Orient Asset Management Corp. and China Cinda Asset Management Corp. -- were created in October 1999.

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