China's Top Auditor Fingers Malpractice

Li Jinhua, auditor-general of China 's National Audit Office, Thursday openly attacked some ministerial financial departments for malpractice and other wrongdoing.

Li's criticism came at the ongoing 16th session of the Standing Committee of the Ninth National People's Congress, when he delivered a report on auditing work.

Li began his report by praising the financial departments for implementation of the central budget and their contribution to the reform, development and stability, but then he turned to complain that some of these departments had been involved in wrongdoing and illegal activities.

"Some of the mistakes are very serious," he stressed. He disclosed four major cases concerning the Ministry of Finance discovered by auditors, as follows:

-- The ministry concerned failed to recover 231 million yuan allocated for subsidizing loss-making state-owned enterprises in 1998;

-- The allocation of one million yuan for the Tourism Development Fund did not comply with the relevant regulations;

-- The rectification and recovery of circulating funds by financial departments was slow; and

-- Special allocations were wrongly turned into regular bank deposits.

Li went on to say that last year state tax departments in 12 provinces were found to have illegally or wrongly handled 9.37 billion yuan, reducing the financial income of the central government by 2.79 billion yuan.

Meanwhile, 11 customs offices checked by the National Audit Office were found to have illegally or mistakenly handled cases involving 1.12 billion yuan, resulting in losses of taxes worth 346 million yuan, he said.

The National Audit Office audited 55 State Council departments and subordinates, and discovered that 18 of them had failed to hand over budgetary income worth 1.728 billion yuan; 36 had wrongly used financial allocations worth 2.109 billion yuan for investment in office buildings and hotels, administrative expenses and illegal loans; 20 had unlawfully held central funds worth 5. 655 billion yuan; and five had collected illegal charges worth 45. 64 million yuan from subordinate units.

The state auditors have uncovered severe misuse of special funds allocated for water projects, poverty-eradication programs and resettlement of people affected by state development projects, the official said. Ten percent of the entire special allocations from the central government were misused last year, he noted.

The state auditors also detected 10.l billion yuan in non- budgetary funds from the Industrial and Commercial Bank of China and the Construction Bank of China, causing losses worth more than 10 billion yuan.

A total of 747 non-budgetary funds, valued at 790 million yuan, were illegally held by the two banks.

Of the 73 state-owned or state-held enterprises, some had turned state companies into collectively-owned or private ones, bringing about seven billion yuan in losses to the government.

The people who were involved in such criminal activities have been handed over to judicial departments for punishment according to law, Li said.

He proposed that the central allocation of subsidies to local governments be brought under stricter control, financial management in central government departments strengthened, the management and supervision of funds raised through issuing government bonds reinforced, the supervision of state banks further strengthened and the quality of bank assets improved.



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